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

Farmers throughout the UK are reacting with frustration to the announcement that inheritance tax relief for agricultural properties will be capped at £1 million.

The National Farmers' Union referred to the budget as a “catastrophic” setback for family farms, warning that it would hinder the younger generation's capacity to continue growing British food and might compel farmers to sell off their land to meet tax obligations.

Numerous individuals have taken to social media to voice their disappointment, including broadcasters Jeremy Clarkson and Kirstie Allsopp. They remarked that the government's choice demonstrates a complete lack of understanding of what is important to voters in rural areas.

The government expressed that it remains dedicated to assisting farmers and acknowledges the essential role they have in providing food for our country.

In the budget presented on Wednesday, the Chancellor revealed that there will still be no inheritance tax on business and agricultural assets totaling less than £1 million. However, for amounts exceeding that threshold, a 50% relief will be applied, resulting in an effective tax rate of 20%, starting in April 2026.

For many years, the APR tax relief has allowed small family farms, which include land for growing crops or raising livestock, 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 career options outside of farming. He believes that the business will become "entirely impractical" due to inheritance tax implications.

He mentioned that the £1 million cap would only apply to the tiniest farms, and this adjustment could lead to larger companies acquiring more land, potentially altering the landscape of agriculture in the UK for years to come.

"Throughout the country, significant negative changes will occur. People often express their dislike for large-scale farms and factory farming, but I believe that this might end up being one of the solutions to the current challenges," he said.

Holly Purdey, a farmer from Somerset and vice-chair of the Nature Friendly Farming Network England, mentioned that many farmers are driven by the desire to maintain their land for the long term and for future generations. She stressed that this mindset could be at risk of fading away.

However, she mentioned that if larger farms are compelled to sell land due to the changes in tax relief, it could open doors for more newcomers to enter the farming industry.

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

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

TV presenter Kirstie Allsopp criticized the Chancellor, claiming he has undermined farmers' chances of handing down their farms to the next generation, jeopardizing the future of many historic estates.

"It's a shocking choice that demonstrates the government's complete lack of awareness about the concerns of rural voters," she said.

Steve Barclay, the shadow secretary of state for rural affairs, expressed on X that the Labour party has violated a straightforward commitment they made to farmers by altering the tax relief policy.

Victoria Vyvyan, the head of the Country Land and Business Association, expressed that the recent shift feels like a complete betrayal. She pointed out that Secretary of State Steve Reed had previously stated, "We have no plans to alter APR."

She noted that around 70,000 farms might be negatively impacted by the £1 million limit: “This threatens the very foundation of British farmers' livelihoods and goes against the principles of growth and investment."

Tom Bradshaw, the president of the NFU, stated, “This budget has been a complete failure for family farmers.”

"The blatant disregard for promises regarding agricultural property relief will strip the next generation of their chance to continue producing British food, prepare for the future, and take care of the environment."

However, the government stated that this adjustment is projected to impact just about 2,000 estates annually.

After the budget announcement on Wednesday, the government announced that it plans to keep the £2.4 billion farming budget for England for the year 2025/26.

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