First the good news. Buried deep in yesterday's Budget was the announcement of a consultation and call for evidence on the taxation of environmental land management and ecosystem service markets. A key part is a look at the scope of APR from Inheritance Tax and whether the constraints in the current rules are a barrier to farmers and landowners entering Environmental Land Management Schemes, the forthcoming Biodiversity Net Gain scheme as well as other similar arrangements.

Some would say that this is long overdue.

Less good, depending on your view, is the news that the consultation will also consider the Rock Review recommendation that 100% APR be limited to FBTs with a term in excess of 8 years (as well as to "new" AHA tenancies).

The Rock Review recognised that there might be special cases where 100% relief should apply to shorter FBTs. The consultation notes that it might be complex to define those special cases – and highlights the risk that landowners might decide simply to take land in-hand rather than grant an FBT for more than 8 years. Conversations with an entirely unscientific sample of landowners would suggest that is exactly what many would do where a longer FBT would not suit them.

The fact that HMRC and HM Treasury have flagged these concerns suggests that some thought has already been given to the idea.

The consultation period runs until 9 June 2023