Pressure builds amid call for reverse on plans to charge inheritance tax on farms

Such a move is “the only sensible course of action”, the head of the National Farmers’ Union said as he prepared for crunch talks with the Environment Secretary.

NFU president Tom Bradshaw was to meet Steve Reed today amid a growing furore over the Chancellor’s decision to make farms subject to inheritance tax.

Under plans announced at the Budget, inheritance tax will be charged at 20% on farms worth more than £1 million, although the Chancellor has said in some cases the threshold could in practice be around £3 million.

But Mr Bradshaw said the prospect of being unable to pass their businesses on to their children would be “the final straw” for many farmers.

He said: “The vast majority of the people who will bear the brunt of this decision aren’t wealthy people with huge cash reserves hidden away.

“They are families that have often spent generations building up their farm businesses to provide food for the nation, often on very tight profit margins.

“Their businesses have struggled through all the changes caused by Brexit, they’ve suffered years of being squeezed to the lowest margins imaginable, with costs of production skyrocketing, they’ve been battered by increasingly extreme weather conditions. They have nothing left to give.”

Tax experts have suggested the changes could affect fewer than 500 farms a year, once the tax thresholds and farmers giving their property to their children before they die are taken into account.

But Mr Bradshaw said the Treasury had a “completely skewed view of the structure of farming in the UK”.

He said: “Very few viable farms are worth under £1 million. That could buy you 50 acres and a house today. No viable food-producing business is 50 acres. The average farm in the UK is more than 250 acres.

“The only sensible course of action for the future of family farms across the country, as well as for the sake of Britain’s food security and our legislated environmental targets, is to reverse this decision.”

Chancellor Rachel Reeves told the BBC’s Sunday With Laura Kuenssberg: “Only a very small number of agricultural properties will be affected, but last year the benefits of agricultural property relief, 40% of the benefit was felt by 7% of the wealthiest land owners.

“I don’t think it is affordable to carry on with a relief like that when our public finances are under so much pressure.”

The Country Land and Business Association  President Victoria Vyvyan said: "Labour has made repeated assurances over the last 12 months that it would not tamper with inheritance tax reliefs, and its decision to now rip the rug from under farmers is nothing short of a betrayal.

“This puts dynamite beneath the livelihoods of British farming, and flies in the face of growth and investment. We estimate that capping agricultural property relief at £1m could harm 70,000 UK farms, damaging family businesses and destabilising food security. In its attempts to raise more revenue the government will cause great damage, jeopardising the future of rural businesses up and down the country.

“Many farmers, operating on slim margins, will now face having to sell land to pay inheritance taxes. At a time of profound change in the industry, adjusting to new agricultural policies, the government is offering no vision for a positive economic future for us in the rural community. We will continue to argue the case for these vital reliefs."

 Sarah Baugh, a partner based  at FBC Manby Bowdler's Shrewsbury office and a specialist in agricultural and rural affairs, said:  "The chancellor delivered a devastating Budget as far as our rural community here in Shropshire is concerned.  

 “Agricultural Property Relief (APR) and Business Property Relief (ABR) have been the cornerstone of generational planning for our rural and estate clients for years, and in one fell swoop the chancellor seems to have forgotten the vital role our farmers play in securing this country’s food security and environmental protections.   There was no long-term thought or understanding of how the countryside works behind this decision, it is nothing more than a short-term cash grab. 

 “This decision will cause wide-spread devastation to our farming community when it comes into force in April 2026. However, as always, our agricultural and rural team remain dedicated and will be here working for our clients to help them plot a course through the rough seas which lie ahead.”