Farmers Weigh Selling Farms or Protesting Due to Inheritance Tax Changes

Agricultural producers have indicated that modifications to inheritance tax regulations might compel them to liquidate their properties or engage in a “mass protest.” During Wednesday’s Budget announcement, Chancellor Rachel Reeves declared that starting in April 2026, a 20% tax would apply to combined business and agricultural assets exceeding £1m in value. Prior to this, Agricultural Property Relief (APR) allowed for the transfer of farmland and related structures to subsequent generations without incurring a charge. We sought responses from farmers located in the south of England. Edward Stevens projects that his “small” cereal and dairy farm might incur a £1m tax obligation under the recently introduced regulations. Mr Stevens, along with his 24-year-old cousin and his 90-year-old grandmother, are all partners in the operation situated at Cole Henley near Whitchurch, Hampshire. “What they’re doing is absolutely stifling for small farms,” he stated. “This farm of about 300 acres, with the properties on it, would be valued probably in excess of £6m or £7m.” He added, “Farms do not come much smaller than this and remain viable.” Stevens further commented, “That million pound threshold needs to be probably 10 times higher as a minimum to really protect genuine small farming businesses.” The Chancellor clarified that the £1m APR cut-off point is in addition to the current inheritance tax threshold, which permits children to inherit a £1m house from their parents or grandparents without charge. Rachel Reeves additionally stated that the alteration would impact “landowners who are very wealthy, some of whom buy land to avoid paying inheritance tax.” Tim Jelfs, deputy chairman of the National Farmers Union in Dorset, expressed his understanding of the Chancellor’s apprehension. The poultry farmer, based in Beaminster, remarked: “This loophole is there where we have lots of city money coming in particularly in Dorset… buying big acreage of land, driving the price of land up to unsustainable figures.” Nevertheless, he contested the Chancellor’s assertion that three-quarters of estates would remain untouched. “That’s going to affect most farms within the country because land values are at an all-time high and the average size of a farm today is roughly about 200 acres,” he commented. “At £10,000 an acre, it’s knocking the door of £2m without outside buildings or house on top.” Jelfs added, “On our own farm, we will be looking at somewhere in the region of a £200,000 bill.” He concluded, “It may mean for a lot of farms having to sell up.” Dan Willis, a Berkshire farmer from Curridge near Newbury, revealed that his family had already contemplated ceasing operations due to the tax modification. He stated: “We were sat round the kitchen table earlier… discussing this very point.” Willis continued, “Do we stop, because how could we burden the next generation with what we’ve got?” He expressed, “We can only hope and pray there’ll be a change in government and a change of heart.” Willis warned, “If not, maybe some sort of mass protest and if farmers stop selling produce just for one day, the country would be to its knees.” He concluded, “We don’t want that… but I think some action has to be taken sooner rather than later because the impact of this is too much for many farmers to bear.” Karl Franklin, a head shepherd who is not personally impacted by the inheritance tax alteration, nevertheless voiced apprehension regarding the future of farming under Labour. “For me, if this is the first red flag from the government, what is there to come?” he questioned. He indicated that a rise in National Insurance contributions for employers might result in a decrease in agricultural workers. The Chipping Norton farmer remarked: “That’s my worry, there’s going to be a less of a labour force to produce our food. ” He further explained, “If you’re a small farm and you’re only employing a handful of people, that’s money for a new member of staff or new equipment.” Readers can follow BBC Berkshire on Facebook, X (Twitter), or Instagram. Copyright 2024 BBC. All rights reserved. The BBC is not accountable for the content of external sites. Information regarding our approach to external linking is available.