Farmers "betrayed" by Labour's £1m inheritance tax relief limit

Farmers throughout the UK are expressing their frustration over the announcement that the inheritance tax relief for farms will be capped at £1 million.

The National Farmers' Union described the budget as a "catastrophic" one for family farms, warning that it would undermine the future of British food production by hindering the next generation's ability to continue this work. They also expressed concern that farmers might have to sell their land to cover tax expenses.

Numerous individuals have taken to social media to voice their disappointment, including broadcasters Jeremy Clarkson and Kirstie Allsopp. They remarked that the choice reflects the government's complete lack of comprehension regarding the concerns of rural constituents.

The government stated that it remains dedicated to assisting farmers and recognizes the important contribution they make to providing food for our country.

In the budget presented on Wednesday, the Chancellor revealed that there will still be no inheritance tax on combined business and agricultural assets valued under £1 million. However, for assets exceeding that amount, there will be a 50% relief, which translates to an effective tax rate of 20%, starting from April 2026.

For many years, the APR tax relief has allowed small family farms—covering land for growing crops and raising animals, along with farm structures, cottages, and homes—to be passed down from one generation to the next.

Richard Payne, a farmer from Somerset, shared with the BBC that he has advised his son to consider a career outside of farming. He believes that the business will become "totally unfeasible" due to inheritance tax issues.

He mentioned that the £1 million cap would only benefit the tiniest farms, and this adjustment might lead to larger companies acquiring more land, potentially altering the landscape of farming in the UK.

"There will be a significant negative shift throughout the country. People often express their dislike for large-scale farming and factory farming, yet I believe that could be one of the solutions that emerges from this situation," he explained.

Holly Purdey, a fellow farmer from Somerset and vice-chair of the Nature Friendly Farming Network England, noted that many farmers are driven by the desire for long-term sustainability and thinking about future generations. However, she emphasized that this focus could be at risk.

However, she mentioned that if larger farms have to sell off land due to the changes in tax relief, it could create opportunities for more newcomers to break into farming.

On X, numerous farmers expressed that this choice could spell doom for small family-owned farms.

Jeremy Clarkson, the host of the show Clarkson's Farm, shared a message urging farmers not to lose hope. He advised them to "take care of yourselves for just five more years, and then this group will be out of the picture."

Kirstie Allsopp, the broadcaster, stated that the Chancellor has undermined farmers' capacity to hand down their farms to their children and has jeopardized the future of our esteemed estates.

"It's a shocking choice that reveals the government's complete lack of awareness regarding the concerns of people living in rural areas," she continued.

Steve Barclay, the Shadow Secretary of State for Rural Affairs, stated on X that Labour has "failed to uphold a clear commitment they made to our farmers" by altering the tax relief.

Victoria Vyvyan, the head of the Country Land and Business Association, described the change as a “complete betrayal.” This comes after Secretary of State Steve Reed stated last year, "We do not plan to alter APR."

She mentioned that it is projected that around 70,000 farms could suffer negative consequences due to the £1 million limit: "This threatens the livelihoods of British farmers and directly opposes the goals of growth and investment."

Tom Bradshaw, the president of the NFU, expressed that the budget has been a major setback for family farmers.

"The blatant disregard for promises regarding support for agricultural land will hinder the ability of future generations to continue growing British food, prepare for what lies ahead, and protect the environment."

However, the government mentioned that this alteration is anticipated to impact only about 2,000 properties annually.

After the budget was revealed on Wednesday, the government announced that it plans to keep the farming budget for England at £2.4 billion for the 2025/26 period.

Food Security Minister Daniel Zeichner stated, “We remain dedicated to supporting farmers and recognize the crucial part they play in nourishing our country.”