Committee publication · Correspondence · 11 March 2026
Correspondence to and from HM Treasury, relating to Farming in Wales in 2025, dated 3 and 25 February
From: Welsh Affairs Committee
Inquiry: Farming in Wales in 2025: Challenges and Opportunities
Summary
The Welsh Affairs Committee requests clarification from HM Treasury on data collection for farming estates affected by inheritance tax reforms to Agricultural Property Relief and Business Property Relief from April 2026. The Treasury responds that current inheritance tax systems are paper-based and lack geographical breakdown capability, but commits to digitisation from 2027-28 and will explore improved data gathering from April 2026, though without guaranteeing Wales-specific reporting.
Key findings
- Committee seeks Wales-specific data on farming estates impacted by APR and BPR reforms commencing April 2026 to enable proper scrutiny of policy impact.
- Treasury confirms current inheritance tax claims system is paper-based and cannot reliably identify agricultural assets by geographical location, as deceased residence location differs from asset location.
- Government committed £52 million at Autumn Budget 2024 to digitalise the IHT service from 2027-28, with design work considering geographical monitoring of agricultural assets.
- Treasury states HMRC will explore improved data collection from 6 April 2026 but cannot guarantee Wales-specific breakdown due to reliance on existing IHT returns process quality and nature.
- CenTax independent report (August 2025) acknowledged difficulty of using deceased residence data for accurate regional analysis of agricultural assets.
Government position
The Government partially accepts the Committee's request. It acknowledges the limitation of current data systems and commits to exploring improved geographical data collection from April 2026 alongside the April reforms. However, it declines to commit to Wales-specific data availability at that time, citing the paper-based nature of current systems and resource constraints. Full digitalisation with enhanced monitoring capability is planned for 2027-28, with geographical factors for agricultural assets included as a design consideration rather than a guaranteed feature.
Tone
ProceduralTopics
Key actors
Ruth Jones MP, James Murray MP, Dan Tomlinson MP, Welsh Affairs Committee, HM Treasury, HMRC, CenTax
Notable line
“Information from claims is not recorded to enable regional or national breakdowns of the number of estates expected to be affected.”
Key Quotes
“… we remain concerned by the continued absence of data relating to the number of Welsh farming estates that may be impacted by the reforms to APR and BPR from April 2026 onwards.”
“… information from claims is not currently recorded in a way that enables regional or national breakdowns of the number of estates expected to be affected.”
“… the only way both we and the Government can fully understand the impact of the Government's reforms in Wales is if APR and BPR data detailing the number of farming estates that accrue an inheritance tax liability can be identified by location.”
“While Inheritance Tax (IHT) returns currently capture information on the main residence of the deceased (i.e. where they lived), this cannot be relied upon for accurate regional analysis of agricultural assets, as the deceased may have lived in one region or nation, but have held assets in another part of the country.”
“… the Government has committed £52 million to digitalise the IHT service from 2027-28 to provide a modern, easy-to-use system, making returns and paying tax simpler and quicker.”
Source · parliament.uk record ↗