Government accused of 'hiding' fact new farm inheritance tax applies now
The government has been accused of “hiding” a fact about its new inheritance tax for farmers which could have major implications.
Rather than kicking in solely during April 2026, the new 20% tax in fact already applies in some circumstances.
It had been thought by some that an April 2026 commencement date would give people time to transfer their farms to their sons or daughters before the tax enters force.
But a source has now confirmed to the News Letter that it is not the case.
On the one hand, the new 20% rate of inheritance tax will not apply if an individual transfers their farm and then dies before April 6, 2026.
However, on the other hand the new 20% rate of inheritance tax will apply for any transfers after October 30, 2024 if the individual making the transfer dies on or after April 6, 2026, but within seven years of making the transfer.
(As with other types of inheritance tax, if you transfer the farm and survive for more than seven years afterwards, there is nothing to pay.)
There was a reference to the October 30, 2024 start date in the government’s long and technical online explanatory notes about the new tax.
But Coleraine farmer William Taylor, who is involved with the UK-wide protest group Farmers for Action, says this was “well hidden”.
Because of this “buried” clause, attempts by farmers to act now and “escape the taxes” are hobbled, he said.
The government says the immediate imposition of the tax is to avoid what it calls “forestalling” – in other words, to stave off attempts to plan ahead and minimise exposure.