Rural

The Prime Minister has said there will be a general election this year. Uncertainty is guaranteed, as parties set out to win over the electorate and the polls currently anticipate a change of government.

We have a new Secretary of State for Environment, Food & Rural Affairs as of Monday 13 November 2023. Labour’s shadow Farming Minister has said he’s interested in abolishing not only agricultural property relief, but also business property relief from inheritance tax. Throw into the mix public access at its most politically charged since the 1930s and you might conclude that things look gloomy for farmers, landowners and the rural economy.

That is, however, to ignore that the countryside has been steadily moving from being a marginal concern to the centre stage for public policy. Climate change, ecological mitigation to facilitate development, food security, and benefits for public goods (such as public access) are all significant issues. We recently spoke to a experienced rural land agent, who claimed: “When I started in 1968, it was exciting if you got a rent review to do. I wish I were starting my professional career again now: there is so much going on and so much potential for landowners.”

So what to watch for in 2024?

  • Labour’s general election manifesto pledges on inheritance tax reliefs. Will Labour play to the left of the party by pledging to abolish agricultural property relief on inheritance tax? While it wouldn’t create any significant tax intake for the Exchequer, could it be helpful politics for Starmer? Will Labour go as far as abolishing business property relief – and sound the death knell for the inherited family business?
  • The introduction of biodiversity net gain regulations will boost an underdeveloped market: using land for ecological mitigation. But landowners should beware the impact on inheritance tax planning, and mind that the metrics for measuring their natural capital correlate with those that others are using.
  • Will the current government implement the promised 2031 cut-off for recording unrecorded or historic public rights of way? And if so, will Labour repeal it? We await the Supreme Court’s decision on the Dartmoor wild camping appeal, on which we have acted.
  • Farmers will probably start to feel the effect as the old-style basic payment tapers from 100% on 1 January 2021, to nothing on 1 January 1 2028. This could result in more land being put up for sale as small farmers, in particular, determine that their operations are not sustainable. If this is the case, it remains to be seen if this land will come to the open market or, as now, be sold privately.

Contacts

James Pavey

Partner, Real Estate +44 (0)777 473 7295

james.pavey@irwinmitchell.com

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