Andrew's insight into inheritance tax, unblocking development, and Land Use Framework
Savills Rural
Specialist advice and insights from Savills Rural across property, land and farming
In my view, these are the three most significant developments over the past month for farms and estates:
Read on to find out my thoughts on these topics…
The campaign against the government’s planned inheritance tax reforms intensified in late January as all the UK’s major supermarkets publicly stated their shared concerns and called for the government to pause and consult on its plans. The TaxPayers’ Alliance also launched a campaign calling for inheritance tax to be abolished. Its survey found that 55% of the public wants to abolish it or cut the rates. When asked to pick the most unfair tax from a list of nine, 46% selected inheritance tax. In relation to inheritance tax affecting family farms and businesses, 59% supported abolishing the tax for businesses and 63% for farms, where there was a majority across all demographic groups.
The Office for Budget Responsibility (OBR) released more information about its assessment of the likely impact and tax income raised by the changes to agricultural property relief (APR) and business property relief (BPR). The Treasury projects the changes will raise ￡500 million by the 2029-30 financial year. However, the OBR’s assessment assigned a “high uncertainty rating” to this forecast because the various tax planning options available to farmers could significantly impact the expected revenue. It also acknowledged the difficulties some older individuals will face in quickly restructuring their affairs in response to the measure. The NFU and the CLA used these revelations in their campaigns, and the NFU also delivered a petition signed by 270,000 members of the public to 10 Downing Street on 24 January.
Until now, the prospect of the government revising its plans has appeared remote. It held firm against a similar backlash when it cut winter fuel payments, but it has just softened the phase-out of the non-dom regime. Whether or not it changes its approach to APR and BPR reform remains to be seen – with the cost of government borrowing increasing, raising tax revenue is back on the table. Still, inheritance tax reform continues to be a noisy issue for a small (0.05%) and uncertain proportion of the national tax take.
The government has proposed new planning reforms to balance infrastructure development with nature recovery in England. The reforms aim to help it make 150 major infrastructure project decisions by the end of this Parliament, including new roads, gigafactories and data centres.
A key element is the creation of a Nature Restoration Fund, which will pool contributions from developers to finance larger, strategic environmental interventions. Scale and connectivity are important ingredients for successful nature recovery so pooling funds in this way should be beneficial. The approach also aims to benefit developers by reducing the need for individual site-level assessments, leading to faster planning approvals. Currently, developers must secure mitigation or compensation for environmental harm before receiving planning permission. The new approach allows developers to make a single payment to the Nature Restoration Fund, enabling projects to proceed while still funding positive environmental outcomes.
The government’s working paper is clear that these changes are not expected to have any substantive impact on mandatory Biodiversity Net Gain. It is keen to incentivise nature positive choices on development sites and fully supports the developing private marketplace for off-site biodiversity units. For other types of offsetting and mitigation, the reforms are likely to mean that the public sector will become an important customer for landowners’ projects.
领英推荐
The development of England’s Land Use Framework has been a long-running saga. First announced in 2022, it has been set back by changes of ministers and government. But it is an important and complicated issue, so it is worth taking the time to get it right. The recent launch of a “national conversation about land use”, a consultation running until 25 April, is its most significant step forward. It was accompanied by a commitment to publish it in July 2025.
The government published an analytical annex containing supporting evidence alongside the consultation document. This includes a chart of the indicative type and extent of land use change needed by 2050 (page 19). It is clear here that change triggered by urban expansion is relatively modest; the driving force is the transition to environmentally focused land management, which is necessary to achieve the country’s net zero and nature recovery targets set by the Environment Act and Climate Change Act. The annex also contains a sequence of maps (pages 28-30) that compare the suitability of land for tree planting, food production, and habitat. They are intended to inform the discussion, although the results are not necessarily surprising - the east and particularly the fens are identified as mainly suitable for food production, there is high habitat potential shown in the North West, whilst the Welsh borders and parts of the South West have high potential for all three uses.
The government will be holding workshops across the country and is keen to emphasise that it will not tell people what to do with their fields or replace the planning system. Instead, incentivisation will be used. The framework will set out a direction for England’s land use and recognise the challenges that land managers face; it will include a toolkit to support their decision-making. Please read our latest blog for more information on the Land Use Framework.
Summing up…
It has been said that “if you are in the red, you cannot go green”, and whilst the impact of the inheritance tax reforms will differ from farm to farm, family to family, it is an additional pressure at a time when farmers are increasingly being asked to change what they do to help the country meet its numerous environmental and land use needs. The Land Use Framework sits at the heart of this, so attending one of Defra’s workshops may be time well invested. Over this year, it will also influence the 25-year Farming Roadmap, the revised Environmental Improvement Plan and a new iteration of the National Food Strategy.
Landscope is also available as a fortnightly newsletter, covering more issues shaping the future of rural estates, agriculture, and land management. Sign up to receive it directly to your inbox here.
ABOUT: Andrew is an Associate Director in the Rural Research team at Savills offering insight and advice on agricultural, environmental, rural property and land use issues across the UK. His responsibilities include rural policy analysis and market intelligence covering the UK farmland market. Outside of work, Andrew runs an arable farm in Lincolnshire.
This newsletter is for general information only and should not be considered professional advice. Savills accepts no liability or responsibility for any direct, indirect or consequential loss arising from the use of, reference to or reliance on, this newsletter or its content.