5. How will the sustainable farming scheme benefit farmers in mid Wales? OQ58465

Thank you. The proposed sustainable farming scheme will support farmers across Wales to become more resilient and produce food in a sustainable manner whilst addressing the challenges presented by the climate and nature emergencies. We are undertaking a range of analysis to inform scheme design, which includes regional and sectoral.

Thank you for your answer, Minister. There have been various concerns raised around the 10 per cent tree-planting element of the scheme. The one specific area that I wanted to raise with you is that there are concerns that parts of farms will now be classed as woodland, which could mean that farmers will now be subject to inheritance tax. Now, as I've understood it, the sustainable farming scheme does not define what 'tree covering' includes, and therefore the relevance of current stipulations for agricultural relief isn't possible to determine. So, can I ask: was this issue considered in the design of the scheme? If not, why not? And how will this specific issue be addressed?

Thank you. So, I have had issues raised with me around that and it's certainly something we're looking at very closely. In relation to inheritance tax, yes, it was something that we looked at and we're still looking at as part of the design of the scheme. As you know, we're in the second stage of the co-design now. And obviously, inheritance tax is a non-devolved issue, so I've asked officials to work very closely with His Majesty's Revenue and Customs concerning the scheme to make sure there are no unintended consequences, if you like.

As you say, agricultural property, some of it qualifies for agricultural relief, and that's land or pasture that is used to grow crops. So, it's very important, when we're looking at that 10 per cent of trees that we want to see each farm have, to share the load across Wales, that we don't create unintended consequences.