In the autumn budget, Rachel Reeves announced that, from April 2026, farms and other business properties, previously passed on tax-free, will now be subject to inheritance tax (IHT).

This change means the next generation of farmers and business owners will have to pay 20% of their property’s value above £1m, raising concerns across the agricultural sector.

Outside the farming community, some argue that wealthy farmers can afford the new financial burden, but this overlooks the difference between being cash-rich and asset-rich. Farmers’ capital lies in land, livestock, and machinery—critical components for food production and environmental care.

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This increased expenditure could threaten many small family farms already struggling financially.

The new policy is set to particularly affect the next generation, making their voices crucial at this pivotal moment.

Ben McClymont, chair of NFU Scotland’s Next Generation Committee, emphasised the role of Agricultural Property Relief (APR) in helping family farms preserve their legacies. He warned that the new budget could threaten a sustainable future for many.

“We will now likely see viable agricultural units being broken up to finance inheritance tax bills,” Ben said.

“This could lead to a major reduction in the availability of farmland for tenancies or contracts. The impact on succession planning, food production, and the next generation of farmers is of incredible concern.”

He also highlighted the value of APR in preventing farms from being “sold on death” and providing “inter-generational farming security,” suggesting that these benefits seem to be overlooked by the UK Government.

The proposed changes could harm farming families whose livelihoods depend on their farms.

Wallace Currie, a rural podcaster and ambassador for agriculture, shared similar concerns about the government’s tax reforms. He acknowledged the uncertainty these reforms have created for rural communities. “It’s going to be crippling for many small family farms, which are vital to local communities,” Wallace said.

However, he also questioned the negative narrative surrounding the changes, noting: “While the policy is a real issue, this kind of negativity can make it harder for those who need hope to hear what’s being said.”

Reflecting on his own situation, Wallace saw potential upsides in the reforms. “This could give children inheriting farms the chance to overcome generational guilt about taking on the responsibility,” he suggested.

“It could also open doors for new entrants into farming and force families to have crucial succession discussions sooner.”

While supporting the industry, Wallace advocated for more open conversations about succession. “Raising the inheritance tax threshold to £3 or £4 million would help,” he said. “But the real issue is that we need to start having these succession discussions now, more than ever.”