Those of us waiting with bated breath for an update regarding the consultation on taxation of environmental land management schemes and ecosystem service markets will have been rather underwhelmed by the Autumn Statement.
Hidden at page 91 of the Autumn Statement document, the update on a consultation announced in the Spring Budget and which closed on 9 June was brief: ‘The government is currently reviewing responses to this consultation and will give a further update in Spring 2024.’
Such a statement provides little comfort to those farmers and landowners considering embarking upon 30+ year environmental schemes which would take their land out of agricultural production meaning that it would fail to qualify for agricultural property relief from inheritance tax in its current form. While business property relief may provide an alternative relief in some cases this will be very much dependent on scheme structure and again, clarity from government would be most welcome.
As Sarah Wray and I commented in our article on the Spring Budget 2023 uncertainty as to the inheritance tax implications of environmental schemes is a significant barrier to land use change. Many farmers and landowners see themselves as custodians of their land, with a duty to hand it down to the next generation in a better state than it was passed down to them. Current government (lack of) policy means that financial and environmental stewardship considerations are pulling farmers in different directions resulting in an inertia which does nothing to address the government’s net zero ambitions.
We look forward impatiently to the government’s update in Spring 2024.
The government is currently reviewing responses to this consultation and will give a further update in Spring 2024.