Farmers across the UK have criticised Rachel Reeves’ decision to remove the exemption from inheritance tax on farms, warning it could lead to food shortages.
The Chancellor announced the changes during Wednesday’s budget as she revealed that, from April 2026, only the first £1m of the value of agricultural properties will be exempt from inheritance tax, with farmland valued above the threshold being subject to inheritance taxes of 20 percent.
The move was met with anger and dismay from the farming community, with petrol head turned farmer Jeremy Clarkson claiming that farmers “had been shafted.”
Shadow Farming Minister Robbie Moore, who is from a farming background, called the move “catastrophic for family farms”.
The Conservative MP further warned that the proposed tax will threaten the nation’s food security and lead to a rise in the price of food. She told Sky News: “This is effectively thievery, putting two fingers up to the farming industry. They’ve completely underestimated the effect this will have, it creates a lot of uncertainty in terms of how that land will be managed.
“If you want to invest in that holding to produce food, you need certainty, and what the announcement creates is uncertainty. It will have a direct impact on the food security agenda and food prices further down the line.”
Estimates from the Country Land and Business Association (CLA) show that whilst a £1 million threshold might sound like a high bar, in reality, it will impact more than a third of the nation’s 209,000 farms.
For many farms to be a viable business proposition they have to farm a sufficient quantity of land. This, coupled with things such as farmhouses and barns, means that they often have a value well in excess of £1 million despite struggling to maintain cashflow.
Many argue that this means that the vast majority of farms will struggle to produce the cash required to inherit farms, leading to them having to be sold and potentially no longer used for farming.
This is a view echoed by CLA president Victoria Vyvyan, who told Sky News the government has “conflated a business asset with personal wealth” in their bid to tax the wealthy.
Earlier this year, Dan Boomer, a British Farmer, told the Express.co.uk how difficult farming in the current climate can be, with many farmers struggling to make ends meet.
He said: “There are financial issues, we’re an industry that puts a million pound in the ground in the hope it grows back.
“Very often, we get to the end of the year and we have lost money. People need to realise that if farms fail, the UK stops being able to feed itself.”
Speaking on Thursday, the Chancellor described the changes as “fair and proportionate”.
She said: “We needed to raise money in the budget yesterday, and we know that there are a lot of landowners who are very wealthy, some who buy land to avoid paying inheritance tax because previously there was no inheritance tax.”
