Baroness Taylor: Inheritance tax changes 'fair and balanced'

The measures, announced by Chancellor Rachel Reeves in the Budget, include inherited agricultural assets worth more than £1 million being liable to the tax at 20 per cent - half the usual rate - from April 2026.

The government hopes it will raise £2 billion a year, but the move has prompted anger from farmers, with protests taking place outside Westminster earlier this week.

Farmers protest in central London over the changes to inheritance tax rules in the recent budget which introduce new taxes on farms worth more than £1 million. (Image: James Manning/PA Wire)

During a House of Lords discussion about council tax referendum thresholds, Sharon Taylor, Baroness of Stevenage and parliamentary under-secretary for housing, communities and local government, described the government's approach to inheritance tax as "fair and balanced".

"We are listening closely to farmers’ concerns and, in fact, the environment secretary met with the National Farmers Union to clarify the changes in the Budget and he met with representatives again yesterday," she said.

"But the approach we’ve taken is fair and balanced and the majority of farms will remain unaffected.

"Currently, 40 per cent of agricultural property relief goes to the seven per cent of the wealthiest claimants. That is not fair or sustainable and has been used by some to avoid inheritance tax.

Baroness Taylor spoke on the issue in the House of Lords. (Image: parliamentlive.tv)

"That is why we are maintaining the 100 per cent relief up to £1 million and 50 per cent after, an effective 20 per cent tax rate, half the normal 40 per cent rate.

"We’ve ensured that tax due can be paid over a 10-year period, interest-free and, if land is transferred seven years before death, farmers pay no inheritance tax."

Baroness Taylor then took aim at the Conservative party, continuing: "We constantly hear these calls from Conservatives about not liking some of the steps we had to take to fill the £22 billion black hole they left.

"We had public services crumbling, including in local government.

"And I’ve heard lots of suggestions about things we shouldn’t be doing, what I haven’t heard from that side is what we should be doing to fill the £22 billion black hole."