THE Labour government’s plans to close inheritance tax loopholes are already having a “chilling effect” on farming and rural businesses in Scotland, First Minister John Swinney warned today.

Speaking ahead of his address to farmers at the AgriScot conference in Edinburgh, the SNP leader took aim at Chancellor Rachel Reeves’ plans to levy 20 per cent inheritance tax on farming assets worth more than £1 million.

Stopping short of TV clown Jeremy Clarkson’s claims that the move could amount to “ethnic cleansing” of a countryside Labour planned to “nationalise,” Mr Swinney called on the UK government to “urgently” commit to publishing impact assessments of the proposals on farmers and crofters in Scotland.

The First Minister said the decision had “led to unacceptable levels of stress, worry and uncertainty among farmers in Scotland.”

He added: “I know this is already having a chilling effect on farming and rural businesses.

“The Scottish government wants to see a tax system that supports rather than hinders orderly succession planning and the transfer of land to the next generation of custodians.

“It is deeply disappointing that the chancellor chose not to work with the Scottish government before acting on this sensitive matter.”

A UK government spokesperson said: “This Budget took the difficult decisions to fix the public services crumbling across the United Kingdom, including Scotland, and address the £22 billion fiscal black hole inherited from the previous government.

“With 40 per cent of agricultural property relief going to the 7 per cent of wealthiest claimants, we made the decision to ensure the relief is fiscally sustainable.

“Around 500 claims each year will be impacted, and farm-owning couples can pass on up to £3m without paying any inheritance tax — this is a fair and balanced approach.”