The loss of APR relief would cause significant problems for land values ,farm bank borrowings and break up farms with many land sales hitting the market to pay Inheritance tax, This would be a massive problem for family farms having to find eye watering sums to stay in business and lessen the farm area.This new tax would surely be the biggest monetary hit to farming in living memory.
"One Labour memo, seen by the Guardian, was a briefing note that estimated increases to rates of CGT alone could generate £8bn for the Treasury in the long term.
There are also proposals to overhaul inheritance tax, with plans for a consultation that could launch in autumn.
These could include radical changes, such as scrapping or updating the rules on agricultural land and business relief.
HMRC could be instructed to prepare figures on a range of options next month, sources said. They would then go to the OBR, which would need 10 weeks to crunch the numbers and share its findings with the Treasury.
The preparatory work suggests a budget could come in early October, as soon as party conferences are complete.
Under the current CGT regime, profits from the sales of second homes or shares in businesses are taxed at a much lower rate than wages.
Some senior figures believe that being more open about plans to raise wealth taxes to transform public services would improve turnout among traditional Labour voters.
The tax options under consideration come amid growing criticism from experts about a “conspiracy of silence” over how the two main parties will afford to fund public services.
The Institute for Fiscal Studies (IFS) said Labour and the Conservatives had not been clear about how they planned to address the “very tight fiscal situation” facing the next government.
The inheritance tax option being looked at involves changes in the rules for the tax on agricultural land and other family businesses, which industry experts regard as “very significant”.
At present, a person can claim up to 100% relief on the inheritance of agricultural land if it is being actively farmed. That has led to concerns that farmland is being snapped up by wealthy people keen to avoid inheritance taxes, and this is driving up prices and shutting out small businesses and farmers.
Some in Labour want to scrap this as well as business relief, which allows a person to pass on a company or shares if it is unlisted with 100% tax relief.
Plans being considered contain a sliding scale of options to weigh up the likely gain for the exchequer, including capping the benefit from agricultural and business relief at £500,000 for each person, rather than scrapping it. In some instances, both forms of relief could be claimed, allowing for a cap of £1m for each person in effect.
This would still raise about £2.3bn by 2029-30, which would be at the end of the OBR’s forecast period if it was introduced in March next year, according to a paper published by the IFS in 2023. The same figure appears in one of the internal Labour documents seen by the Guardian.
Sources said wider changes were also being considered on gifts and inheritance tax. Currently, no inheritance tax is due on gifts if they are made by a person who lives for more than seven years after the gifts are made."
"One Labour memo, seen by the Guardian, was a briefing note that estimated increases to rates of CGT alone could generate £8bn for the Treasury in the long term.
There are also proposals to overhaul inheritance tax, with plans for a consultation that could launch in autumn.
These could include radical changes, such as scrapping or updating the rules on agricultural land and business relief.
HMRC could be instructed to prepare figures on a range of options next month, sources said. They would then go to the OBR, which would need 10 weeks to crunch the numbers and share its findings with the Treasury.
The preparatory work suggests a budget could come in early October, as soon as party conferences are complete.
Under the current CGT regime, profits from the sales of second homes or shares in businesses are taxed at a much lower rate than wages.
Some senior figures believe that being more open about plans to raise wealth taxes to transform public services would improve turnout among traditional Labour voters.
The tax options under consideration come amid growing criticism from experts about a “conspiracy of silence” over how the two main parties will afford to fund public services.
The Institute for Fiscal Studies (IFS) said Labour and the Conservatives had not been clear about how they planned to address the “very tight fiscal situation” facing the next government.
The inheritance tax option being looked at involves changes in the rules for the tax on agricultural land and other family businesses, which industry experts regard as “very significant”.
At present, a person can claim up to 100% relief on the inheritance of agricultural land if it is being actively farmed. That has led to concerns that farmland is being snapped up by wealthy people keen to avoid inheritance taxes, and this is driving up prices and shutting out small businesses and farmers.
Some in Labour want to scrap this as well as business relief, which allows a person to pass on a company or shares if it is unlisted with 100% tax relief.
Plans being considered contain a sliding scale of options to weigh up the likely gain for the exchequer, including capping the benefit from agricultural and business relief at £500,000 for each person, rather than scrapping it. In some instances, both forms of relief could be claimed, allowing for a cap of £1m for each person in effect.
This would still raise about £2.3bn by 2029-30, which would be at the end of the OBR’s forecast period if it was introduced in March next year, according to a paper published by the IFS in 2023. The same figure appears in one of the internal Labour documents seen by the Guardian.
Sources said wider changes were also being considered on gifts and inheritance tax. Currently, no inheritance tax is due on gifts if they are made by a person who lives for more than seven years after the gifts are made."
