Budget delivers a ‘spitting cobra into family business’
Labour’s broken promises on inheritance tax relief for family farms will break the generational chain and jeopardise our food security.
Farmers are enraged by Labour’s cut on the inheritance tax relief for working farms in The Budget.
The change, which was announced by Chancellor of the Exchequer Rachel Reeves in October’s Budget, means that from April 2026, inherited agricultural assets worth more than £1million, which were previously exempt, will now incur inheritance tax at 20%. The Country Land & Business Association (CLA) estimates this change could affect up to 70,000 family farms.
In 2023 the average price of arable land in England was £11,200 per acre. This means a farm of only 450 acres, which would be worth approximately £5m, would be subject to death duties of £800,000. This new policy is likely to force family farms to sell off their income-generating assets to pay the levied inheritance tax. This in turn would force them to halt food production, prevent investment in new technologies and break the chain between farming generations.
Many farmers have said the new policy would mean they will be forced to sell off land to larger, corporate agricultural businesses, or investors with limited interest in environmental concerns or communities. The inheritance tax change will probably also have dire consequences for the shooting sector and the livelihoods of gamekeepers, due to the increased financial pressures faced by farms and estates.
Victoria Vyvyan, president of the CLA, said: “Labour promised to be the party for the countryside, for growth, and vowed not to cut inheritance tax reliefs. Now they have broken these promises. How can rural Britain trust them again?
“This Government thinks inheritance tax reliefs for farmers are “loopholes”. In reality, they are targeted reliefs designed to protect Britain’s rural economy, jobs and food security.
“The fear and anger felt by farmers and rural businesses cannot be overstated.”
East Sussex National Farmers’ Union chairman Martin Hole told Shooting Times: “The Budget has delivered a spitting cobra into family businesses, obscured in a fog of lies. A completely unaffordable tax on businesses reeling from disease, policy and geopolitical disruption, this further undermines industry commitment to their, and the country’s, goals of sustainability and nature recovery.”
Yet another blow to farmers and keepers was the reclassification of double-cab pickups, which are now set to be taxed as cars. This will bring far higher benefit-in-kind charges than their current van status, and delayed capital allowances.
