‘Essential’ that farms can be passed from generation to generation – Swinney

John Swinney has said it is “essential” that farms in Scotland can be passed down from generation to generation, as he expressed his opposition to the UK Government’s tax changes.

The First Minister said the Treasury had not considered aspects of Scots law when it sought to change agricultural property relief, warning that Scottish tenant farmers are at risk of losing out from the changes.

The First Minister used a speech to the National Farmers Union Scotland AGM on Friday to pledge to “stand united” with farmers”, saying they are “right to be outraged”.

He told the audience in Glasgow that Brexit and the implications of climate change mean the agriculture community is facing “incredibly challenging” circumstances.

Swinney said: “I’m particularly concerned about the impact on Scottish tenant farmers, with some at risk of being caught up in the tax change.

“As we know, Scots law on agricultural leases is different from the law south of the border, and it’s far from clear that the Treasury have understood that significant distinction.”

He also said there is an “essential requirement for there to be a tax set of arrangements in place that will enable farms to be transferred from generation to generation in the way that they have been able to do up until now”.

Across the UK there has been anger from farmers over upcoming inheritance tax changes for farming businesses, which will limit the 100% relief for farms to only the first £1 million of combined agricultural and business property.

For anything above that, landowners will pay a 20% tax rate, rather than the standard 40% rate of inheritance tax (IHT) applied to other land and property.

Swinney told the AGM in Glasgow that having represented a rural constituency for more than 25 years, he has “seen how farmers have navigated huge challenges through some very demanding years”.

He added: “The impact of Brexit and the implications of climate change create a set of conditions that are incredibly challenging.

“The sweeping changes the UK Government has introduced – without any consultation with the farming community or the devolved governments – only add to the pressures farmers are facing.

“They are a cause of real anxiety and farmers are right to be outraged – and I am particularly concerned about the impact on Scottish tenant farms, with some at risk of being caught up in the tax change.”

He said: “Let me be crystal clear – the Scottish Government stands united with Scotland’s farmers in opposition to these changes.

“This Government has your back – we are committed to supporting our nation’s farmers.”