There has been great concern and uncertainty since the proposed changes to APR and BPR were announced in October. Protests continue, and Parliament is due to debate today (10 February 2025) the online petition calling for the proposed changes to be scrapped for “working farms”.
Much of the conversation has been around how many farms will be affected by the changes, and what the increase in funds will actually be. In January the, OBR issued a supplementary forecast in respect of the proposed changes to APR and BPR, which included this statement:
The central estimate for the costing is an increase in revenue of £0.5 billion by 2029-30, with the behavioural response reducing the static yield by around 35 per cent. There are upside and downside risks to the degree of attrition in the long term, and the yield from this measure is not likely to reach a steady state for at least 20 years. Any increase in gift-giving will increase attrition and reduce receipts after at least a seven-year period, while the potential proliferation of new tax planning strategies will do likewise.
The changes proposed do not appear to increase revenues by a huge amount in the context of what the Revenue bring in, and not, at least, for a few years. It seems those projections may actually decrease with planning steps taken, including gifting; and revenues may not steady for 20 years. It also appears that the policy costing was seen as ‘high’ uncertainty.
Whether these comments add to the voice for a revision, remains to be seen. I know there have hopeful whispers of a change to the policy announced, though it seems the Government remain steadfast in their approach. The Financial Secretary to the Treasury recently insisted that “..the measures will go ahead as planned.”
For more details on the announced changes, read Ben's blog 'How Could the Budget Affect Tax and Estate Planning?'
If you would like to discuss the proposed changes, or need advice on your IHT and estate planning, please contact Roythornes Private Client Department.