Putting an end to inheritance tax reliefs would ‘tear apart’ family farms and threaten the UK's food security, according to the Country Land and Business Association (CLA).
The warning follows a CLA poll in which the majority (86%) of farmers stated it was ‘likely’ they would need to sell their land after death if inheritance tax reliefs were removed.
More than 90% of respondents said that removing these reliefs would have a damaging impact on the UK’s long-term food security, with only 5% disagreeing.
MORE NEWS | UK Dairy Showcase boosts global buyers interest
MORE NEWS | Boy, eight, who died after being shot on Cumbria farm is named
Representing thousands of farmers and landowners, the CLA highlighted the survey results as proof that eliminating tax reliefs would ‘tear apart’ family farms at a ‘crucial time’ for the agricultural sector.
Over 500 farmers participated in the poll, which comes during concerns that the government may alter agricultural property relief (APR) and business property relief (BPR) in the autumn budget.
APR ensures the continuousness of farming operations after a farmer’s death, while BPR serves a similar function for other types of family businesses.
CLA president Victoria Vyvyan warned that many farmers could be bound to sell land to cover inheritance taxes, threatening livelihoods.
She pointed out that uncertainty around taxation is one of the most significant issues facing the rural sector.
She said: “There is a chill wind blowing through the tax environment and CLA members are very nervous that careful plans to sustain multi-generational businesses are about to be thrown to the wolves.
“Removing or even capping inheritance tax reliefs would have a major impact on the viability of family farms, jeopardising the future of rural businesses up and down the country."
The CLA also stressed that these reliefs enable farmers and rural business owners to continue producing food, maintaining landscapes, and supporting the rural economy.
They argue that a stable capital tax system is essential for giving business owners the confidence to make long-term investments, particularly those needed for growth or environmental stewardship over the coming decades.
Without relief or even with a cap of £500,000, as some have recommended, farmers would face large tax bills, the CLA warned.
Data shows that 17% of UK farms failed to make a profit, and 59% earned less than £50,000 in 2022/23, leaving little room to cover inheritance tax from farm income, the CLA pointed out.
Ms Vyvyan added: “Many farmers could be forced to sell land to pay inheritance taxes, putting livelihoods, and the nation’s food security, at risk, especially if the land is bought by corporates with deep pockets and no inheritance tax concerns.
“At a time of profound change in the industry, we need stability for our businesses while we adjust to new agricultural policies."
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here