Jackie McCreery

In a pre-budget submission, SLE outlines critical areas requiring government action, including rural housing, farming, tourism, and land management, which it believes will benefit the whole of the UK.

Among the key requests from SLE are:

• Rural Impact Assessments: Introduce Rural Impact Assessments (RIAs) to ensure that all government policies are developed with rural communities in mind. These assessments would ensure that rural interests are fully considered and protected.
• Tackling climate change: Extend Agricultural Property Relief (APR) from Inheritance Tax (IHT) to include land used for environmental management, such as peatland restoration and woodland creation. This would support farmers and landowners who are leading efforts to tackle climate change through sustainable land management.
• Affordable rural housing: Remove VAT on the conversion of unused rural properties and new affordable housing developments. SLE argues that high taxation on rural housing development is hampering efforts to address Scotland’s housing crisis.
• Food and farming: Create a five year agricultural funding package to allow farmers to plan for the future with confidence. This would support investments in climate-friendly practices, food production, and nature restoration.
• Tourism: Reverse the abolition of favourable tax treatment for Furnished Holiday Lets, which has been a lifeline for many rural businesses. SLE highlights that tourism plays a critical role in the economic vitality of rural Scotland.
• Farm Tenancies: Consider ways to encourage entrants into farming via farm tenancies using the taxation system.

Jackie McCreery, legal adviser at Scottish Land & Estates, said: “Rural Scotland contributes enormously to the UK, from producing food to generating renewable energy and providing essential ecosystem services.

“Yet, despite this contribution, rural communities often face challenges that are not fully appreciated by policymakers.

“This Budget is a chance to reset that relationship and give our rural economies the support they need. Rural communities often feel sidelined when policies are made, as their unique challenges are overlooked. That’s why we’re urging the UK government to implement Rural Impact Assessments, ensuring that any legislation is fit for purpose in rural areas and supports the needs of these vital communities.”

Ms McCreery continued: “SLE is urging the Chancellor to maintain the current reliefs from Inheritance Tax for family businesses, namely Agricultural Property Relief and Business Property Relief. Family farms are the backbone of rural areas and if businesses need to be broken up to pay tax once every generation then the future of the rural economy, food production and biodiversity is at stake.

“Equally, ensuring future relief from inheritance tax for land that is taken out of agriculture for environmental management is vital and we would urge the UK Government to proceed, without delay, with legislation on this matter. Where a farmer or landowner is making land use choices to reflect the public policy of the day, such as achieving biodiversity net gain or carbon sequestration, they should not be penalised for doing so.”

She added: “Housing is also one of the most critical issues facing rural Scotland. Removing VAT on the conversion of disused buildings into homes and incentivising affordable housing development will help alleviate the housing shortage in rural areas. This is not just about building homes, it’s about building rural communities.

“Scotland’s rural landowners are also at the forefront of the fight against climate change, whether through restoring peatlands or expanding woodlands. However, these efforts require clarity and support from the government, particularly in ensuring that commercial native woodland projects are recognised under the tax system for the environmental and economic benefits they provide.

Ms McCreery concluded: “The rural economy must be at the heart of national planning. From decarbonising our homes to supporting agricultural innovation, there are huge opportunities for the government to take decisive steps.

“However, unless fiscal policy is designed with rural needs in mind, we risk widening the gap between urban and rural Scotland.”