The High Court has fast-tracked a judicial review of the government’s decision to impose inheritance tax on farming families.
It follows claims that the government acted unlawfully by introducing major reforms to long-standing tax reliefs after only a limited technical consultation – despite the wide impact on family farms and businesses. The ruling means a high court judge will decide whether the government acted unlawfully in making changes to agricultural and business property relief without first consulting with taxpayers in line with its then-policy.
Everyone affected
Cambridgeshire farmer and lead claimant Tom Martin said the case mattered to everyone affected by the proposed tax changes. “I am proud to speak for the concerns of farmers and business owners whose livelihoods would be impacted.”
He added: “The government improperly denied us the chance to influence the policy and its implementation. I look forward to taking this important case to court.”
Lawyers representing Mr Martin and other farming families will argue that the government’s decision was especially damaging given the likely impact of the changes on farmers and the wider agricultural and commercial sectors.
The claimants say that the lack of a more comprehensive consultation fell well short of longstanding legal standards – and breached the government’s own public law duties towards them and others.
James Austen, of law firm Collyer Bristow, said the claimants would be arguing that the government’s consultation exercise was inadequate and unlawful. He added: “We look forward to putting their case before the court.”
Tax experts are divided over the prospects of a ruling against the government. Dan Neidle, of Tax Policy Associates, said: “These attempts to judicially review primary tax legislation are doomed. Parliament is sovereign.”
But Stuart Maggs, tax expert with of Norwich-based Howes Percival, said the court could declare the consultation to have been insufficient in accordance with the government’s rules at the time. “It would be pressure on the government to withdraw the changes.”
The hearing will take place over two days on dates to be announced in February or March. It follows 16 months of upheaval for agriculture – and tractor protests in the heart of London – after the government imposed 20% inheritance tax on farm assets worth more than £1m. A partial climbdown has since seen the government increase the inheritance tax threshold from £1m to £2.5m.
Landowners continue inheritance tax fight
The battle to overturn the government’s decision to impose inheritance tax on farming families will continue, says the Country Land and Business Association.
The fight against the policy will continue despite the government’s partial climbdown which has seen the threshold for inheritance tax increase from £1m to £2.5m, said CLA head of external affairs Jonathan Roberts.
“The threshold increase is welcome – but not enough,” he said. “We fight on.”
Mr Roberts said the threshold increase – which is effectively £5m for married couples – would provide relief to many families. But he added: “Make no mistake: this fight is far from over.”
The change was of limited help for businesses with larger land holdings, diverse operations, or significant investment in expensive machinery and infrastructure, said Mr Roberts.
“The policy may now be slightly less dreadful, but it remains fundamentally bad and deeply damaging to the UK economy,” he said. It continued to threaten the viability of productive family businesses and undermine long-term investment in rural Britain.