Campaigning Results In APR/BPR Amendments By Government

In the last days before Christmas, the UK Government has announced a significant change to its planned reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR), with the valuation threshold rising from £1 million to £2.5 million or £5 million for married couples.

The change comes after intense lobbying from organisations across the UK and for a large number of smaller family farms and smaller family businesses the news will be welcome.

However, as Paul Andrews, Founder and CEO of Family Business United explains, "The changes to the legislation are obviously welcome but for Britain's larger family firms, many of them multigenerational that have been investing in growing their businesses for generations, the changes reduce the impact to a degree but will not remove what will remain as a large inheritance tax liability going forward."

"What is even more surprising is the timing of the announcement and the way that it has been communicated. The recent Budget was not that long ago and this could have been announced then and it seems odd to leave it right up to the news deadlines before the festive season."

"Family businesses are the backbone of the UK economy in terms of the jobs they provide, the income they create, the wealth they generate and the communities that they support and more needs to be done to mitigate the risk of losing some of them as they may need to be broken up or sold to fund future liabilities."

"Family farms put food on the able each and every day and as part of the broader family business sector are growth enablers and make a massive contribution to the national economy."

"These businesses want certainty in policies and decision-making in order to plan for the long term without the emotional angst and turmoil that comes with continuing changes to policies that have such a profound impact."

"Whilst we welcome the amendment, we would recommend that a full review of the proposals be undertaken and communicated so that plans for growth can be made and that going forward constant announcements, revisions and updates are not required around policies that have such an impact on the people and family businesses who are the beating heart of the nation," concludes Paul.

Gavin Lane, President of the Country Land and Business Association, said: "This change will come as an enormous relief to thousands of family farms across the country who faced seeing their businesses taxed out of existence. The Government deserves credit for recognising the flaws in the original policy and changing course."

"However, this announcement only limits the damage – it doesn't eradicate it entirely. Many family businesses will own enough expensive machinery and land to be valued above the threshold, yet still operate on such narrow profit margins that this tax burden remains unaffordable."

"On that basis, we thank Ministers for the constructive dialogue, we look forward to working in partnership to grow the rural economy, whilst continuing to call for these reforms to be scrapped entirely."

Check out the full update on the HM Treasury website here