Environment Secretary Steve Reed (Image: Getty)
A family farmer who confronted the Environment Secretary about Labour’s changes said he was given advice how to avoid liabilities.
David Barton, 57, from Middle Duntisbourne, near Cirencester, approached outside the environment, food and rural affairs select committee hearing room in Parliament following Tuesday’s protest.
Farmers have been left furious at the Government’s plans to limit the existing 100% inheritance tax relief to only the first £1 million of combined agricultural and business property.
Mr Barton, a divorced father of two, is the sole owner of his 265-acre mixed beef and arable farm in the Cotswolds, which is worth around £5.5 million but gives him a return of around £30,000 to £50,000 a year.
After taking into account the £1.5 million that would not be subject to inheritance tax due to various reliefs, his children would face an £800,000 tax bill to pay over ten years.
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10,000 farmers descended on Whitehall on Tuesday (Image: Getty Images)
Mr Barton told The Times: “I just said to Mr Reed, can you explain to my son how he is going to pay his inheritance tax?
“He started trotting out the exemption of £3 million, and I said we only get £1.5 million. They are only using best case scenarios and he didn’t really have an answer.
“He said I could gift it to my son under the seven-year gifting rule to avoid inheritance tax, but to do that you can’t draw any benefit from the farm afterwards or you incur inheritance tax, and I don’t have a private pension.
“If you continue to live on the farm afterwards you have to pay market rent.
“I have invested everything I have earned into the farm so my son inherits a strong business. I haven’t prepared for a pension because we didn’t have to have one.
“The fact the Government is saying, ‘If you are clever there are loopholes to avoid this tax’ — dear Lord.”
Mr Barton said the seven-year gift rule – where no inheritance tax is due if the person lives for seven years after passing on the gift – made him feel like he has “a price on my head”.
He added: “The fact is nobody knows when their number is up. It’s like playing Russian roulette with your farm.”
A Government spokesman said: “Our commitment to farmers remains steadfast. We understand concerns about changes to agricultural property relief but the majority of those claiming relief will not be affected by these changes.
“Around 500 claims each year will be impacted, and a range of exemptions and allowances are available, such as being able to make payments over ten years, interest free.
“This is a fair and balanced approach that protects the family farm while also fixing the public services that we all rely on.”