UFU Deputy President William Irvine on his County Armagh farm. Picture: Cliff Donaldson
The Ulster Farmers’ Union welcomes the in-depth report, Impact of the October 2024 Budget’s Inheritance Tax Changes on Northern Irish Farms and Farming Taxpayers, by the Northern Irish Rural Valuers Association (NIRVA) and the Central Association of Agricultural Valuers (CAAV). This comprehensive work provides an invaluable analysis which shows just how detrimental the tax changes will be for family farms across Northern Ireland.
Key Findings:
- Substantial impact on farming taxpayers:
The report reveals that at least 6,000 NI farming taxpayers could be affected by the changes over a generation, possibly affecting up to 420 cases per year. This is in stark contrast to the government’s estimate of 500 taxpayers affected annually across the whole UK. - Underestimation by government figures:
NIRVA and CAAV’s analysis indicates that NI alone could account for between 40% – 85% of the total number of affected farming taxpayers estimated for the entire UK. This underlines a significant underestimation by the Treasury of the impact on our local farming community. - Challenges for livelihood farms:
The study assessed the values of nine typical farm types, focusing on those that primarily produce a livelihood. The findings demonstrate that many of these modest, owner-occupied farms, often in sole ownership, are highly vulnerable. They face severe financial burdens that could force drastic operational changes, such as unsustainable increases in herd sizes or other cost-cutting measures. It was noted that if the tax charge for a 67 head lowland suckler herd in sole ownership is £297,000, (paid over 10 years), the tax due would be £29,700 a year. With an annual labour requirement of 1,407 hours, that would equate to an extra £21.11 per hour; almost twice the minimum living wage. A sole ownership 100 head dairy herd would face a tax charge of £457,800 over ten years requiring a 41% increase in the herd merely to cover this charge, a virtually impossible prospect given current market conditions.
Furthermore, the assessment highlights just how difficult it would be for a new farm successor to invest and develop the business when it is required. Financial pressures created by the inheritance tax changes would prevent farmers from investing in new technologies, the uptake of which is needed to help meet environmental targets set by DAERA and DEFRA. This includes farm renewables, low emission slurry spreading, air pollution reduction technology and restoration of habitats.
Commenting, UFU president William Irvine said, “The research carried out by NIRVA and CAAV on the impact that inheritance tax changes would have on farm families in NI, not only underscores the urgent need for a more accurate assessment by government, but also for immediate action to protect the local farming community. It’s absolutely shocking that NI alone could account for between 40% and 85% of the total number of affected farming taxpayers estimated for the entire UK.
We stand in full support of the detailed work by NIRVA and CAAV. It provides clear evidence that the proposed measures will destroy the livelihoods of many hardworking farmers across NI and destabilise our entire agri-food industry.
“These findings are a wake-up call for the Labour Government. NIRVA and CAAV’s meticulous work confirms what many in the farming community have long suspected. It’s time our government face the facts and admit that Treasury’s figures severely underestimate the true impact of these inheritance tax changes before it is too late. We must protect our farms, our families, and our future, which in turn will benefit everyone in society. I urge Treasury and policymakers to review these proposals urgently and to engage in meaningful dialogue with all stakeholders to ensure that the measures in the October 2024 Budget do not imperil the backbone of NI.”
To view the report, please click the links below:
Budget – October 2024 – NIRVA IHT Report 04 02 25
Budget – October 2024 – Impact of IHT on Northern Irish Farms – V1B 04 02 25
