Conacre motion in Assembly

Speech by David Ford MLA delivered to Northern Ireland Assembly on Mon 28th Sep 2009

Speaking in the debate on the conacre motion, David Ford MLA: "My party colleagues and I will support the motion and the amendment. By way of introduction, I declare my interest - technically my wife's interest - in a shared family farm, which is recorded in the Register of Members' Interests.

"Other Members have discussed the unique situation of conacre land in Ireland. According to aspects of HMRC guidance, a conacre arrangement is equivalent to a grazing licence in Great Britain. The HMRC website refers to land in such condition as being treated as eligible for agricultural property relief under inheritance tax. However, it does not spell out the full details and implications of that.

"Mr Willie Clarke and Mr Kennedy, in particular, have discussed the nature in which land is held in this society. Nowhere in HMRC's guidance is there any reference to that. It is not true to suggest that people's ownership of family farms - which, in many cases, grandfathers and great-grandfathers sweated blood to purchase under land Acts of a century ago and to maintain as family holdings - is somehow equivalent to owning stocks and shares or investment property. Regardless of whether that satisfies section 105(3) of the Inheritance Tax Act 1984, it certainly does not fit the psyche of people in this society. That problem is simply not recognised in the way that HMRC treated that particular case and others, such as those highlighted by Mr Paisley Jnr when he proposed the motion.

"On one hand, a problem exists that does not apply to every farm in Northern Ireland because it relates solely to business-property relief where there is development potential. On the other hand, as we heard from Mr Paisley Jnr, HMRC now decrees what size of a farmhouse is suitable for a particular size of farm. Apparently, if HMRC does not approve of the size of a house, it will regard it as being more than is appropriate for the farm, even though, in other cases, domestic dwellings are not liable to inheritance tax in certain circumstances. Therefore, there are real issues with the way in which the matter is being treated.

"I remember going to a school open evening a few years ago with one of my children. The geography department's display showed documentation that related to a teacher's grandfather's purchase of the family farm from the estate, which he still held, although he was clearly only farming it part time.

"I have seen the same situation occur among my family and in-laws. People's attachment to the land is such that, until now, they have not believed that HMRC could simply regard it as investment property. They cannot believe that they must face that realisation.

"That means that the Assembly must learn two lessons. First, it must determine what can be done to draw that to HMRC's attention. I am, perhaps, almost as sceptical as Mr Willie Clarke about the Assembly's ability to get that changed soon. Secondly, the Assembly must make the implications clear to people. At present, those who have let land under conacre agreements for many years will have to consider a different way to manage it; perhaps by setting up some special kind of partnership or by passing it on to family. At present, many farms in Northern Ireland that are located in areas where there is development potential are at risk because of that ruling.

"It is not credible to say that the Assembly will simply make representations to HMRC because that may well not be enough. The Court of Appeal's judgement, sadly, was given by three judges from Northern Ireland who seem to have been overborne upon by representations from HMRC special commissioners, although, clearly, they were under fairly tight constraints.

"However, their decision recognises that a spectrum of different circumstances applies in such cases. The message for many people, which Ian Paisley Jnr expressed reservations about, is that they should shift themselves and their property from one end of the spectrum to the other if they wish to maintain their inheritance. The problem that we face is that people will get nowhere if they continue as they are."

Mr Deputy Speaker: "I ask the Member to draw his remarks to a close."

David Ford: "I hope the Department of Agriculture and Rural Development and the Department of Finance and Personnel will show us that they can work together. It is a pity that we only have one Minister in the Chamber this afternoon; I trust that she can report on behalf of both Departments when responding."

Motion: "That this Assembly notes with extreme concern the possible extension of the focus on the "McClean conacre case" by HM Revenue and Customs and is deeply worried at the severe disruption which this could have on our family farming tradition in Northern Ireland."

Amendment at end insert: "; and calls on the Minister of Finance and Personnel and the Minister of Agriculture and Rural Development to engage with Revenue and Customs to find a suitable solution."

Motion passed with amendment.