06518-24 Williams-Key v express.co.uk

Summary of Complaint

1. Alan Williams-Key complained to the Independent Press Standards Organisation that express.co.uk breached Clause 1 (Accuracy) of the Editors’ Code of Practice in an article headlined “Warning to farmers at risk of 400% tax 'sting' trying to dodge inheritance raid”, published on 11 December 2024.

2. The article – which appeared online only - reported that:

“Farmers trying to escape Rachel Reeves’ inheritance tax raid could instead find themselves lumped with a bill of a different kind.

“In a move to avoid the 20% death tax on assets worth over £1 million, farmers are anticipated to give their assets to their children while they're still alive.

“After seven years, the gift is no longer liable for tax, avoiding the chancellor's highly controversial inheritance tax reform.

“However, this could incur a steep capital gains tax bill, which is paid on profits made on the asset since it was purchased. This ‘sting’ tax could be passed down to the children of farmers who choose to defer their capital gains tax liability.

“The base rate is 18% on profits over £3,000 annually, increasing to 24% as the higher rate. For example, a £2million inherited farm that was originally bought for £500,000 would rack up a capital gains tax bill of £480,000.”

3. The article then reported comments by an accountant, who was reported as having said: “because farms are often owned for decades and past down [sic] to the next generation, the capital gains tax bill could be staggering. He told [another newspaper]: ‘When an asset is sold at today’s market rate, and the gain is based on a valuation from 1982, the capital gains tax liability becomes enormous.”

4. The complainant said that the headline was distorted in breach of Clause 1. He said that there was no 400% tax rate in the UK, and that the article – which only referenced Capital Tax rates of 18% and 24% - did not support the headline claim.

5. The publication did not accept that the Code had been breached. It said that the headline’s reference to a “400% tax ‘sting’” was a reference to a 400% increase in Capital Gains tax since 1982. It said this was based on a specific example used by an accountant. Although this specific example was not referenced in the version of the article under complaint, on 6 January 2025 – two-and-a-half weeks after it had initially been made aware of the complainant’s concerns on 23 December - the article was amended to include the example in question, and the following was added to the article:

“A family inheriting land bought in 1982 could see their capital gains tax bill soar by 400% because of holdover relief, according to accountant […who] also warned that, because farms are often owned for decades and past down [sic[ to the next generation, the capital gains tax bill could be staggering.”

6. On the same date, the publication also added the following correction to the top of the article:

“A previous version of this article did not make clear that the 400% tax increase could apply to a family inheriting land bought in 1982, for example. We are happy to clarify this and the article has been amended accordingly, and apologise for any confusion.”

7. The publication said that it considered the amendments made to the article, along with the correction, added crucial information to the article and clarified in which circumstances the 400% “sting” would apply. It therefore considered that the article had been properly corrected, in line with the requirements of the Editors’ Code.

8. To support its position, the publication provided two articles. One, which had been published on a professional networking website, reported that “one of the UK’s top 30 accountancy firms” had warned of “a ‘stealth tax’ that could saddle the next generation of farmers if landowners rush to gift assets to their children. Capital Gains Tax liabilities could increase by over 400% for some farmers according to calculations.”

9. The article included the calculations in question; these showed that, based on a land purchase price of £1,000 per acre (in March 1982), if the land was gifted prior to someone’s death to avoid Inheritance Tax, the capital gains realised by the sale of the land in 2024 would be £1.1 million – this would result in a Capital Gains Tax (CGT) payable of “up to” £264,000. This was compared to a case where, under old CGT rules, a farm was held until an individual’s death, and the payable CGT was £48,000. This, the calculations showed, was an increase of 450%. Therefore, the publication was satisfied that there was a basis for the headline: the figures showed that, in the scenario outlined in the amended article – where land had been purchased in 1982, gifted to avoid inheritance tax, then sold in 2024 – there would be a 450% increase in the tax owed.

10. The complainant said that the article remained confusing to readers without a professional background in tax accounting. He said that the article provided by the publication to support its position explained why there would be an increase in CGT – explaining that previously, such land was re-valued when a farm business was inherited upon someone’s death – but the article under complaint did not make this clear. Therefore, he considered that the article still did not support the headline, and still breached the terms of Clause 1 (i).

Relevant Clause Provisions

Clause 1 (Accuracy)

i) The Press must take care not to publish inaccurate, misleading or distorted information or images, including headlines not supported by the text.

ii) A significant inaccuracy, misleading statement or distortion must be corrected, promptly and with due prominence, and — where appropriate — an apology published. In cases involving IPSO, due prominence should be as required by the regulator. 

iii) A fair opportunity to reply to significant inaccuracies should be given, when reasonably called for.

iv) The Press, while free to editorialise and campaign, must distinguish clearly between comment, conjecture and fact.

Findings of the Committee

11. By the conclusion of IPSO’s investigation, it was not in dispute that avoidance of inheritance tax by gifting land could, in very specific circumstances, result in CGT payable at a rate which was over 400% higher than the comparable inheritance tax. It was also not in dispute that this “tax sting” would only apply to specific scenarios, nor was the specific example of a family inheriting land purchased in 1982 disputed. However, the original article did not make clear that this “tax sting” would apply only in these very specific circumstances. The Committee therefore considered that the article was misleading, as it gave the impression that all farmers who were “anticipated to give their assets to their children while they're still alive […] could incur a steep capital gains tax bill” of approximately 400% more than they would have otherwise paid. The Committee also considered that the article did not support the headline, as required by Clause 1 (i), given it did not set out the circumstances which would lead to the “tax sting”.

12. The Committee considered that, by omitting information about the specific circumstances in which the tax would be payable, the publication had not taken care to ensure it did not publish misleading information. It also found that the headline was not supported by the text of the article. The information about the circumstances in which the “tax sting” would be payable was known to the publication, given the article which it used as a source for its own coverage set out the precise scenario when the “sting” would apply. There was no reason, in the Committee’s view, why this information could not have been incorporated into the original article to provide readers with the basis for the headline’s claim, and the failure to do so represented a breach of Clause 1 (i).

13. The article was misleading on a point of national debate: the tax which must be paid when land is passed to family members on an individual’s death. The Committee also noted the importance of reporting on matters related to probate and inheritance in an accurate manner, given that misleading information may influence readers in making decisions regarding their own tax affairs. In such circumstances, the Committee considered that the article was significantly misleading on the above point. For these reasons, a correction was required under the terms of Clause 1 (ii).

14. The publication had, two-and-a-half weeks after being made aware of the complaint, amended the article to include an example of a case where the 400% tax sting would apply, and published a clarification at the top of the article. The clarification made clear that the original version of the article “did not make clear that the 400% tax increase could apply to a family inheriting land bought in 1982, for example”, and that the article had been clarified to amend this. It also apologised for any confusion caused. The Committee considered that the wording of the correction, by making clear why the original article was misleading, and in which circumstances the “tax sting” may apply, put the correct position on the record. The correction also appeared in a prominent location, directly beneath the headline which included the reference to the “400% sting”. Given that the headline itself was not inaccurate – rather, the original version of the article did not include the information which supported the headline - the Committee was therefore satisfied with the wording of the correction and its prominence.

15. When considering whether or not the publication had acted with sufficient promptness in publishing its corrective action, the Committee was mindful that the publication had first been made aware of the complaint on 23 December, immediately prior to the festive period, and a time when publications are generally operating with less staff. It further noted that the clarification had been published soon after the end of the festive period, on 6 January. In such circumstances, the Committee was satisfied that the clarification was published with sufficient promptness. There was, therefore, no breach of Clause 1 (ii).

16. The complainant had also expressed concern that, even after amendments had been made to the article, it remained confusing. Given the article did not explain the precise reasons why the “tax sting” would apply – namely, because land is no longer re-valued on an individual’s death – the complainant also considered that it still did not support the headline. 

17. In some cases, omitting information may render an article misleading – and, in this instance, omitting the specific circumstances in which the tax sting would apply did render the article misleading. However, the Committee did not consider that omitting details about previous changes to the tax system rendered the article inaccurate, misleading, or inaccurate: it was still clear that such a “tax sting” would apply, and the circumstances in which it may apply, without this information. There was, therefore, no breach of Clause 1 on this point.

Conclusions

18. The complaint was partly upheld under Clause 1 (i).

Remedial action required

19. The published clarification put the correct position on record and was offered promptly and with due prominence. No further action was required.

Date complaint received: 12/12/2024

Date complaint concluded by IPSO: 25/03/2025