The government must use the upcoming spring budget to implement the Rock Review's taxation recommendations on agricultural tenancies, the tenanted sector has said.
Many of the 74 recommendations made within the Rock Review, delivered to the government in October, relate to the fiscal environment within which agricultural tenancies operate.
The Tenant Farmers Association (TFA) said it was 'vital' that the Treasury acted on the recommendations in the upcoming spring budget, taking place on 15 March.
The body said the need to change the taxation environment within which landlords let land was 'now urgent'.
Over half the land in the tenanted sector of agriculture in England and Wales now falls under Farm Business Tenancies (FBTs), with that proportion due to accelerate over the next 10 to 15 years.
With the average length of term on these agreements just three years and with nearly 90% of those tenancies let for five years or less, the TFA warned that they provided "no incentive for investment".
"The need to change the taxation environment within which landlords let land is now urgent," said TFA chief executive, George Dunn.
“We must move the dial to encourage longer term lettings and there is broad agreement that the most effective way of achieving that is through changing the way in which landlords are taxed particularly on Inheritance Tax.
"Currently, there is little, if any, return to the public interest from the huge benefit given to landlords through Inheritance Tax Agricultural Property Relief.
"It must be re-geared to benefit those willing to offer more reasonable levels of security of tenure,” explained Mr Dunn.
In addition, landlords letting for 10 years or more could be given new reliefs through the income tax system similar to those which have been operating in the Republic of Ireland, he said.
"A combination of carrot and stick will be a powerful force for good in driving longer-term tenancies and protecting the long-term security of the let sector of agriculture whilst operating at least fiscally neutrally,” said Mr Dunn.
