🚜 💼❓"Hi ChatGPT, what will the impact of Budget 2024 be on agriculture and land use in the UK?"
For those of you in a rush who - like me - didn't have a chance to watch the budget or read through the accompanying documents, don't worry! I've fed them into ChatGPT, and here’s the breakdown of the key changes in today's hashtag#Budget for those in farming, agriculture, and land management:
🔸 Agricultural Property Relief (APR) Changes 🌾
Starting April 2026, Inheritance Tax (IHT) relief caps mean only the first £1M in agricultural and business assets will qualify for 100% relief, dropping to 50% relief above this threshold—big implications for large (and not so large 👀 ) farms & estates who will have to pay IHT of 20% above £1m. Land in environmental agreements will be eligible for APR though.
**Judging by the NFU (National Farmers' Union) and The CLA's immediate reaction this is going to be by far the most controversial bit of the budget for farming - is £1m just too low a threshold given the large capital value (in land and machinery) even a relatively small farm represents? At this level, it's not just going to be large estates impacted, but relatively small family farms. Perhaps a time for some farmers who have been putting it off to talk about succession... (Geoff Sansome has written a good post on exactly this: https://lnkd.in/eESYYY4S)
🔸 Higher Capital Gains Tax (CGT) 📈
From today, CGT on most asset disposals rises from 20% to 24%, meaning a significant increase in tax liabilities on land and farm sales.
🔸 Farming budget maintained 💰
DEFRA’s budget for farming has been maintained (in cash terms at least, not 'real' terms) at £2.4B, though funding (of £5B in total) is only committed for the next two years. This aligns with the end of many three-year Sustainable Farming Incentive (SFI) schemes, likely setting the stage for a significant review on their impact and value.
**Note to SFI claimants: Be prepared to demonstrate value for money. For example, a comprehensive Soil Management Plan can help meet SAM1 requirements! Head to https://lnkd.in/evUUYbSH
🔸 Flood Resilience & Climate Defense 💧
£2.4B earmarked for flood resilience over two years will help protect vulnerable farmland and maintain productivity amidst rising climate risks.
🔸 R&D for Agriculture 🔬
At least £58M will support research into climate resilience and net-zero farming, plus biosecurity upgrades to defend against plant and animal diseases—vital for food security and farm health.
🔸 Carbon Border Adjustment Mechanism (CBAM) 🌍
From January 2027, CBAM will extend to high-emission imports (like fertilisers), aligning with climate goals but potentially increasing costs for agriculture.
Here's the link to all the documents if you want to dive in yourself: https://lnkd.in/eSniRWeB
Image: ChatGPT's take on the classic budget photo 'with some farming touches added in' 🤣
