One day after Collyer Bristow’s announcement that the High Court has granted urgent permission for the Judicial Review claim against the Government’s failure properly to consult on its Agricultural Property Relief (APR) and Business Property Relief (BPR) changes, which the firm is bringing on behalf of a coalition of affected farmers and businessowners, to proceed to a ‘rolled-up’ hearing in February or March comes news that the House of Lords Economic Affairs Committee’s Finance Bill Sub‑Committee has issued its keenly anticipated report into those APR/BPR changes (and the application of IHT to pensions, which is not covered here).

One day after Collyer Bristow’s announcement that the High Court has granted urgent permission for the Judicial Review claim against the Government’s failure properly to consult on its Agricultural Property Relief (APR) and Business Property Relief (BPR) changes, which the firm is bringing on behalf of a coalition of affected farmers and businessowners, to proceed to a ‘rolled-up’ hearing in February or March comes news that the House of Lords Economic Affairs Committee’s Finance Bill Sub‑Committee has issued its keenly anticipated report into those APR/BPR changes (and the application of IHT to pensions, which is not covered here).

The Committee has issued a detailed and impressive report on the draft Finance Bill 2025–26, including the Government’s reforms to APR and BPR. It is a document of real weight, combining careful analysis with clear recommendations. Gratifyingly, the Committee has understood that the means by which tax policy is developed matters to its outcome, and so it did not restrict itself to looking at the new provisions themselves: it also considered how the policy came about and has proceeded towards the statute book.  As the Committee explains, these proposals “have since been revised on several occasions … reflecting underlying problems with the Government’s approach to tax policy making, in particular in relation to its approach to consultation.”

The Committee’s work is serious, balanced, and constructive. The Committee deserves high praise for shining such a bright light on the worrying state of tax policy‑making and for setting out, with particular acuity, the practical dangers that the APR/BPR changes will create for farms, family businesses, and the advisers who help them.

Key themes:

1) Complexity, valuations, and liquidity: “not … sufficient to resolve many of our concerns”

The Committee notes that Government amendments made during the inquiry “go some way to alleviating some of the burdens”, but stresses that “these changes are not by themselves sufficient to resolve many of our concerns that remain about what these reforms will mean in practice.”

For estates with APR/BPR assets, the Committee warns that valuations will become more difficult, more expensive, and more contested: “Administration is likely to become more complex for estates with qualifying assets … increasing costs and causing delays, particularly if there are capacity constraints among specialist valuers.”

Liquidity is an acute worry for asset‑rich but cash‑poor farms and businesses: “There is a material risk of liquidity stress … with witnesses telling us about their concerns as to the impact this could have on future business investment if there is a need to sell assets to fund IHT liabilities.”

2) The six‑month IHT deadline: “cannot be right to impose … a timescale … likely impossible to meet”

The Committee’s conclusion could hardly be clearer: “It cannot be right to impose on taxpayers a timescale for payment of tax if that timescale is for many likely impossible to meet.”

It therefore recommends extending the payment period for APR/BPR‑affected estates from six to twelve months, together with what it calls a “soft‑landing”, by suspending late‑payment interest for at least two years.

3) A systemic failure of consultation: “some of these issues … might have been avoided”

In a highly significant passage, the Committee warns: “Repeated re‑design, and the consequent uncertainty for those affected, reflect consultation and stakeholder engagement that came too late and was too narrowly framed … With early, effective consultation … some of these issues, and indeed the need for later revisions, might have been avoided.”

I agree: this criticism directly reflects the evidence that Collyer Bristow submitted to the Committee.

The Committee’s concerns are underlined by the Government’s own shocking sequence of partial policy reversals and late‑stage amendments:

• Indexation (July 2025): CPI indexation from April 2030 announced when draft legislation published.
• Valuation principles (July 2025): drops ‘related property’ valuation principle for multiple trusts.
• Interest-free period (July 2025): extends interest-free 10-year instalment period to all APR/BPR-qualifying property.
• Transferability U‑turn (November 2025): The Government reversed its earlier position and made the APR/BPR allowance transferable between spouses.
• Threshold U‑turn (December 2025): The £1 million allowance was abruptly increased to £2.5 million per person.
• Further rapid revisions (January 2026): Written Ministerial Statements, Committee‑stage amendments, and updated HMRC policy papers were issued in quick succession to retrofit the above changes.

Individually, each of those was a welcome and necessary improvement to this inadequate tax policy.  But taken together, they provide undeniable evidence for the Committee’s view that the original design was not tested adequately with stakeholders before it was announced and implemented.  The whole sorry episode has been a textbook example of how not to design and implement tax policy.  And whilst the Government was new and inexperienced when its first Budget was delivered in October 2024, the long-serving and experienced civil servants in HM Treasury and HMRC who were advising ministers ought to have known better.  In failing to temper the Government’s unseemly haste in brining these measures to the statute book, officials failed their ministers and the farmers and business owners who will be affected by the deficient proposals now before Parliament.

One regret

I only have one regret about the Committee’s otherwise sterling report.  Having correctly identified the Government’s catalogue of serious failings in its lack of consultation with affected taxpayers and representative bodies, and having so persuasively described the serious consequences awaiting those who qualify for the reliefs arising from the hurried and flawed implementation, I find it surprising that the Committee was so sanguine about these changes being passed into legislation.

Many people continue to argue that the better course for the Government would be to withdraw the measures from the current Finance Bill, conduct the meaningful consultation that should have happened in the first place, and then, if it wishes, reintroduce improved, workable measures in a future Bill.  Whilst it is entirely a matter for the Chancellor to do as she thinks best, that option does still remain open to her.

Conclusions

The Committee has produced a thoughtful, evidence‑based report that deserves careful attention in Whitehall and the Palace of Westminster. The Committee’s own words capture the position exactly: “The Government’s Tax Policy Making Principles matter in practice.  Speed must not come at the expense of effective policy that has been subject to meaningful consultation.”

That is an admirably clear call for better tax‑making.  The APR/BPR changes are its acid test, and the hope must be – even now – that the Government will decide to change course and start listening.  But only the foolhardy will be holding their breaths.

James Austen, Partner, Collyer Bristow LLP