Ruth Davidson says inheritance tax changes for farms could be version of Reeves’ ‘pasty tax’ political news

Ruth Davidson has predicted that Rachel Reeves will eventually reverse her decision to impose higher inheritance tax on farms.

But I am saying Election consequences of Sky News podcast, the former Tory Scottish leader compared the move to George Osborne’s infamous “pasty tax” U-turn in the budget.

Discussion on tomorrow’s budgetMs Davidson said she did not believe the Chancellor’s financial plan was omnipotent, but of all the measures, she believed the inheritance tax on farms was most likely to be reversed.

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Reforms to inheritance tax mean that from April 2026, £1m of combined business and farming estates will not be taxed.

But for estates over £1 million, inheritance tax will apply with 50% relief (at an effective rate of 20%).

Ms. Davidson Said: “Ten lakhs seems like a lot.

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“But if you have some farm buildings, sheds, machinery sheds, some land, like almost all family farms, even small family farms, are above that limit.

“If you pass your farm on to your children and they have to find it, it’s a big shock with a huge cash tax bill that you have to pay to the government, and the thing about farmers is that they have to own the land. But they are short of cash because farming is not profitable on a large scale.”

The Scottish politician pointed to the outrage on social media from farmers who, he said, are posting “heartbreaking” 30-second videos from their tractors.

“The thing is, losing one farm is not the same as losing another business,” he said.

“It can’t come back, and the reason I know it is because that line is exactly the same line that Keir Starmer gave at the NFU conference last year.”

celebrity farmer jeremy clarkson — whose Amazon Prime debut Clarkson Farms documents his forays into the world of farming — was one of those who reacted to the tax increase on Christmas.

He wrote, “Farmers. I know you have been shocked today. But please do not get discouraged.”

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While Place, Place, Place presenter Kirsty Allsopp said: “Rachel Reeves has betrayed all farmers, she has destroyed their ability to pass on their farms to their children, and she has destroyed the future of all our great properties. Granted, this is a terrible decision that shows the government has no understanding of what matters to rural voters.”

The “pasty tax” refers to a proposal by Mr Osborne in the 2012 March Budget which aimed to make hot takeaway snacks subject to 20% VAT.

This tax caused an outcry among bakers at the time and even pasty makers protested outside Downing Street to hold a petition against the controversial tax.