Labour’s inheritance tax reforms ‘threaten the very fabric of the countryside’
In yesterday's Budget, the Chancellor announced a sweeping overhaul of the inheritance tax system, including changes to a relief which had allowed agricultural land to be passed on tax-free.
Jeremy Clarkson and the National Farmers Union (NFU) have attacked the Labour Party for breaking its promises around agricultural relief.
Changes to inheritance tax announced in the Budget will contribute to the breakup of family-owned farms and “threaten the fabric of the countryside”, experts have said in an attack on Labour’s latest revenue-raising plans.
In yesterday’s Budget, the Chancellor announced a sweeping overhaul of the inheritance tax system, including changes to a relief which had allowed agricultural land to be passed on tax-free.
From April 2026, only the first £1m of the value of agricultural land will be exempt from inheritance tax. Above that threshold, the relief will drop to 50 per cent.
This means that inheritance tax will apply on the full value of farms and rural estates above £1m at an effective rate of 20 per cent.
Reeves claimed that the changes would “continue to protect small family farms”, estimating that three-quarters of properties would be exempt. But the decision attracted a lot of criticism from experts.
James Farrell, partner and head of rural consultancy at Knight Frank, said the £1m threshold was “pretty meaningless” given the level of capital employed in farms and small businesses across the country.
“(The) changes threaten the very fabric of the countryside and the communities that, for generations, have been the custodians of the land that we all rely on for our day-to-day existence”.
“Farms and estates will have to sell land, or property, to pay the inheritance tax, threatening all of these critical intents and adding further challenge to many already beleaguered rural communities,” he said.
Decision slammed by Jeremy Clarkson
The National Farmers Union (NFU) also slammed the decision, warning that it would contribute to lower domestic production and higher prices.
“Just because a farm is a valuable asset it doesn’t mean those who work it are wealthy,” Tom Bradshaw, president of the NFU said.
“Let’s not sugar-coat this, every penny the Chancellor saves from this will come directly from the next generation having to break-up their family farm.”
Bradshaw said the government’s “shameless” broken promises will “snatch away much of the next generation’s ability to carry on producing British food”.
Steve Reed, the environment secretary, had previously said that the government had “no intention” of changing the relief.
“When you look farmers in the eye and make them a promise, keep it,” Bradshaw said.
Jeremy Clarkson, who owns a 1,000 acre farm in Oxfordshire, said that farmers had been “shafted” by the tax change.
“But please don’t despair. Just look after yourselves for five short years and this shower will be gone,” he posted on X.
