Farming in the crosshairs – Protests ignite over Inheritance Tax shake-up
By Heather Bright, Partner and ARA specialist
The Government’s recent Budget announcement has ignited widespread concern across the farming sector.
From April 2026, inherited agricultural assets worth over £1 million, previously exempt from inheritance tax (IHT), will now be taxed at 20 per cent.
While the Government insists this is a “fair and balanced approach” that will only affect a minority of farmers, new analysis from the Central Association of Agricultural Valuers (CAAV) and the NFU paints a very different picture.
The scale of the issue
Contrary to Treasury estimates, the CAAV calculates that as many as 75,000 individual farm business owners will be affected over the next generation, equating to around 2,500 per year.
This is five times higher than the Government’s prediction of 500 annually.
The discrepancy arises from the Treasury’s narrow focus on Agricultural Property Relief (APR) alone, overlooking the complex interactions between APR, Business Property Relief (BPR), spouse relief, and the diverse nature of modern farming businesses.
The figures tell a stark story:
- There are 70,000 farms in the UK with more than 125 acres, of which 40,000 exceed 250 acres.
- Average non-land assets, such as machinery and diversified business activities, add £668,000 to a typical farm’s worth.
- Combined with rising land values and the proposed £1 million relief cap, many family farms will struggle to avoid significant tax liabilities.
Fallout from the Budget – protests and outrage
The farming community has responded with urgency.
Protests have erupted across the country, including a go-slow tractor demonstration in Dover and a mass march in London, with high-profile figures like Jeremy Clarkson joining the outcry.
Farmers have accused the Government of betraying rural communities, warning that these changes could threaten the very survival of family farms.
How farmers can mitigate the impact of the changes
Although the situation presents challenges, there are steps farmers can take to safeguard their assets and ensure their farms remain viable for future generations:
Review your IHT exposure
Understand how the new rules apply to your farm.
This includes assessing whether your assets qualify for APR, BPR, or other reliefs and identifying potential liabilities under the new £1 million cap.
Maximise APR and BPR claims
Both APR and BPR remain essential tools for mitigating IHT liabilities.
We can work with you to ensure all eligible assets, such as diversified income streams and machinery, are correctly categorised to maximise relief.
Plan for succession early
Succession planning can help minimise IHT exposure.
Options such as restructuring ownership, gifting assets during your lifetime, or using trusts can ensure a smoother transition to the next generation while reducing tax liabilities.
Strategically manage spouse relief
While assets can pass tax-free between spouses, the £1 million cap is not transferable.
Structuring your estate to balance asset distribution between partners can help avoid exceeding the threshold upon the second death.
Factor in liabilities
Business liabilities, such as loans, can reduce your taxable estate.
Ensuring accurate record-keeping and considering the strategic use of debt can further minimise exposure.
Securing your legacy
Family farms are the backbone of Britain’s rural economy, food supply, and environmental stewardship.
Yet these changes risk driving a wedge through the sector, forcing some farmers to sell land or assets to meet tax bills, potentially paving the way for large-scale industrial farming.
The protestors’ slogan, “No Farmers, No Food, No Future,” serves as a sobering reminder of what is at stake.
Now, more than ever, farmers must action to secure the future of their farm and their legacy.
The changes may be challenging, but with the right planning, you can protect your farm and its future.
Contact us today to discuss how we can support you.