The UK government’s reported plan to introduce a lifetime cap on tax-free gifts has been branded “heartless” and a direct threat to the future of family farming.
Harriet Cross, MP for Gordon and Buchan, has condemned Chancellor Rachel Reeves over proposals that would limit how much parents can pass on to their children before death without incurring inheritance tax.
At present, families can gift unlimited sums or assets tax-free provided the donor survives for at least seven years.
But a lifetime cap would enable the Treasury to levy tax on transfers made many years earlier – a move Ms Cross says would devastate farming families already facing Labour’s planned “family farm tax.”
The Conservative MP said: "Rachel Reeves is coming back for more, but now it’s not just farmers who are at risk from these damaging tax raids on families.
“Nothing is safe from this chancellor – Rachel Reeves is taxing and axing the future of families to fund her failures.”
The warning follows Ms Reeves’ refusal to back down over the controversial inheritance tax proposals during her first visit to Northern Ireland, where she defended it as “a right and fair decision” designed to “protect the incomes of ordinary people.”
Ms Cross, a vocal critic of the policy, argues the combination of a lifetime gift cap and a farm inheritance levy would make passing holdings between generations virtually impossible.
“Labour’s family farm tax means farmers will now have to pass farms on early, but a lifetime cap will likely make passing on a farm at any time impossible,” she said.
“An inheritance tax transfer cap, plus the family farm tax, will be the end of family farming.”
She added that Ms Reeves’ comments reveal a worrying disconnect from rural Britain: “It’s appalling that the Chancellor does not class farmers as ‘normal working people’ and is using the industry as a guinea pig for her failures.
"She is completely out of touch with rural life and the damage she is causing to our nation’s food security. The lack of empathy she continues to show towards the plight of our farmers who are the engine of our economy is despicable.
"We will not give up the fight. I, along with the wider agricultural industry, will continue to fight against the family farm tax to the very end.”
