Farms avoid inheritance tax hike

The NFU said it was relieved that agricultural property had not had its exemption from inheritance tax axed in last week's pre-budget announcement.

Industry leaders have lobbied furiously in recent weeks following rumours that it may be reduced or scrapped. The union welcomed the extension of empty-property relief, which helped diversified farming businesses hit by the recession.

But chancellor Alistair Darling sparked anger by increasing national insurance contributions, bumping up the cost of employment in the sector. This would hit competitiveness, the NFU warned.

It also questioned the logic of reducing the incentive to participate in climate change agreements, which had already produced significant carbon savings.

President Peter Kendall commented: "We have said that a vibrant and productive farming sector depends in part on a tax system that stimulates investment and innovation while also encouraging farmers to take a long-term view of their businesses.

"This pre-budget statement talks long about investment but falls short of the mark when it comes to delivering the fiscal measures that would really stimulate investment in farming businesses.

"As agriculture takes a long-term view of its future, facing up to the challenge of feeding a growing global population while impacting less on the environment, we also need a long-term vision from the Treasury."

Kendall said he was glad that the chancellor avoided cutting departmental spending. "Given the strategic importance of the farming sector in meeting the challenges of growing demand for food and a low-carbon economy, it is important to think carefully about where efficiency gains can and should be sought," he advised.


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