Radical proposals for Inheritance Tax reform have been published by Westminster's All Party Parliamentary Group on Inheritance and Intergenerational Fairness – and agri-industry experts have warned that they would be a 'hammer blow' to farm succession.

The APPG is advocating that many reliefs – including Business Property Relief and Agricultural Property Relief – should be abolished outright.

At the centre of its simplification proposals is a flat rate gift tax for lifetime or death transfers of a rate perhaps as low as 10%. All relief other than the existing spouse and charity exemptions would be abolished. There would also be no CGT uplift on death.

The group has also proposed a death allowance between spouses of £325,000 or a similar level, instead of a nil rate band. There would be a £30,000 annual lifetime allowance for lifetime gifts. The exemption on gifts for death after seven years as is currently the case would also be discontinued.

Commenting on the APPG's thinking, Saffery Champness partner Jamie Younger said: "These proposals advocate wholesale change, the pretext being that the current system is outdated and abused, allowing inheritance tax planning to significantly reduce receipts to HMRC and for tax on many gifts to be avoided altogether.

"Rather than tinker round the edges, the APPG approach is one of root and branch reform. From a rural/farming perspective, loss of the ability for intergenerational transfer of agricultural land, property and other business assets without penalty would be a hammer blow in terms of succession," said Mr Younger.

"The only concession in the APPG proposals with regard to BPR/APR is that there would be an option to pay tax on death or lifetime transfers in 10 year instalments, or until an earlier sale if assets comprise land and business."

Mr Younger said such fundamental change, if adopted, would be a 'serious game-changer for the entire inheritance tax system as we know it'.

"If it looks likely that these proposals will be taken forward, then serious consideration should be given by some individuals to re-arrange their affairs under the existing regime, making use of the reliefs currently available," he advised.