NFU urges Labour backbenchers to back IHT amendments

With the budget fast approaching and hopes of any major government U-turn on inheritance tax fading, the NFU has shifted its focus to pushing for legal amendments to the proposed reforms.

At NFU Council on 4 November, it estimated there may already be a pool of roughly 40 backbench Labour MPs willing to push for amendments to the current proposals for agricultural and business property relief.

However, by the NFU’s own reckoning, the amendments would need the backing of at least 80 Labour MPs to have any chance of being implemented.

See also: Farmers face ‘unfair’ interest charges on inheritance tax

It is understood the Finance Bill is likely to go through to the committee stage after Christmas.

NFU president Tom Bradshaw told Farmers Weekly support from opposition parties had been fantastic.

And he already knew they would be prepared to support amendments aimed at mitigating the impacts of inheritance tax (IHT) reforms.

However, he said the critical thing would be having an amendment or two supported by the Labour Party.

“That is what our absolute focus is on, trying to get as many of those Labour MPs as possible to be willing to think about any amendment they may be willing to sign,” said Mr Bradshaw.

“We have been trying to build that coalition of backbenchers.”

Potential amendments

The NFU’s in-house legal team has already begun looking at and drafting potential amendments.

It is also working with industry experts due to the complex nature of the amendments that may be considered by MPs.

Mr Bradshaw added: “To a large degree it will have to be what the MPs want to put forward.

“So, we will make sure our legal team will be able to help as much as possible in drafting those amendments.”

Suggestions cited by the NFU president included various ideas around changing IHT thresholds, an amendment to make the tax-free allowance transferable between spouses, and a potential year-long extension to existing tax rules.

He said: “There is another one about the removal of the forestalling clause, which would suddenly give people that window to plan under the old system rather than under the new system.

“There is talk about an extension for 12 months, but if that doesn’t remove the forestalling clause then people are still trapped in the same window.”

He added that there will probably also be an amendment coming forward from opposition parties about scrapping the tax completely.

Final pre-budget push

Lobbying the government to reform the IHT proposals ahead of the Budget is now “at the 11th hour” according to the NFU.

About 8,000 letters have been sent by its members to 639 MPs in the past week.

Mr Bradshaw urged unity among council members amid internal criticism and “sniping from the sidelines”.

He added that the union had given its best but cannot force the government to change.

“This team can’t do anymore, we are giving it everything,” he said.

“All we can do is put forward the best arguments.

“We have won the argument, but haven’t won the fight.”