Legal Battle Over Labour's Inheritance Tax Reliefs Set for March Hearing
The legal challenge against proposed modifications to agricultural property relief (APR) and business property relief (BPR) has been scheduled for an urgent two-day hearing next month. This judicial review represents a significant confrontation over one of the most substantial shifts in UK inheritance tax (IHT) policy in decades.
Background of the Proposed Changes
Following the government's initial decision to increase the inheritance tax threshold to £1 million, the proposed alterations to APR and BPR triggered considerable backlash from rural communities throughout the year. In response to this widespread opposition, the government executed a partial reversal in December, elevating the threshold from £1 million to £2.5 million, with the new rate set to take effect in April 2026.
The Judicial Review Challenge
The legal action was formally initiated by farmers Thomas Martin and George Martin, who are affiliated with the campaign organization Farmers and Businesses for Fair Tax Relief, alongside the professional services firm Alvarez & Marsal. The claimants contend that the government acted unlawfully by allegedly failing to adhere to its established 2011 'tax consultation framework'.
Represented by the law firm Collyer Bristow, the group is pursuing a formal declaration that the consultation process was fundamentally flawed and violated established 'good governance' principles. Last month, the High Court authorized an expedited hearing on this matter, and the case is now officially listed for a two-day hearing on March 17 and 18.
Unusual Court Proceedings
Typically, judicial review cases are presided over by a single judge. However, in this instance, the proceedings will be conducted before a Divisional Court, which consists of a panel of senior judges who will collectively determine the outcome. Given the constitutional implications involved, the Speaker of the House of Commons has been granted permission to intervene in the case.
Legal Perspectives
James Austen, a partner at Collyer Bristow, emphasized the gravity of the issues at hand. "The issues raised in this judicial review are profound: they concern the standards by which Government should have consulted before implementing reforms with profound consequences for families and businesses across the country," he stated.
"We welcome the decision to convene a senior multi-judge panel and look forward to presenting the claimants' case in full at the Royal Courts of Justice in March."
This legal battle underscores the ongoing tensions between government tax policy initiatives and the procedural safeguards intended to ensure fair and transparent governance. The outcome of the March hearing could have far-reaching implications for future tax consultations and reforms affecting agricultural and business sectors nationwide.
