Farmers “duped” by Labour's £1m inheritance tax aid cap

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Farmers throughout the UK are livid after information that inheritance tax aid for farms will likely be capped at £1million.

The National Farmers Union mentioned it was a “disastrous budget” for household farms, which might “take away the next generation's ability to produce British food” and drive farmers to promote land to pay the tax. .

Many have taken to social media to precise their disappointment, with broadcasters Jeremy Clarkson and Kirsty Allsopp additionally saying that the choice reveals the federal government has “no understanding of what matters to rural voters”. Not there”.

The government said it was still committed to supporting farmers and “their important position in feeding our nation”.

In Wednesday's Budget, the Chancellor announced that, although there will be no inheritance tax on combined business and agricultural properties worth less than £1 million, there will be a 50% relief on the effective rate of 20% above that. April 2026.

For years, APR tax relief has enabled small family farms – consisting of land used for raising crops or animals, as well as farm buildings, cottages and houses – to be handed down across generations. .

Somerset farmer Richard Payne told the BBC that he had already told his son to think about doing something else other than farming, as the business would become “fully unviable” as a result of inheritance tax.

He said the £1 million limit would only cover the smallest farms and the change could result in more land being bought by larger businesses, changing the future shape of UK farming.

“There will be terrible changes throughout the land. “Everyone says they don’t like mega-farms and they don’t want factory farming, but I can see there would be only one answer to all of that,” he explained.

Fellow farmer Holly Purdey, from Somerset, who is vice-president of the Nature Friendly Farming Network England, said that “longevity and generational considering” were often key motivators for farmers to care for the land – and that could be lost.

But, he said, any forced sales of land from larger farms as a result of the tax relief changes could help more newcomers to farming.

At the exchange, many farmers said the decision would mean the end of small family farms.

Jeremy Clarkson, who presents the TV program Clarkson's Farm, posted – telling farmers not to despair but to “simply take care of your self for 5 brief years and this bathe will go away”.

Broadcaster Kirsty Allsopp said the Chancellor had “destroyed the flexibility of farmers to move on farms to their kids, and ruined the way forward for all our nice properties”.

“This is an appalling resolution that reveals the federal government has completely no understanding of what issues to rural voters,” he said.

The Secretary of State for Rural Affairs, Steve Barclay, said on Twitter that Labor had “damaged a transparent promise to our farmers” by making changes to tax relief.

Victoria Vivian, chair of the Country Land and Business Association, said the change was “nothing wanting a betrayal”, as Secretary of State Steve Reid said last year: “We haven’t any intention of adjusting the APR.”

He estimated that 70,000 farms could be adversely affected by the £1 million limit: “It places dynamite underneath the livelihoods of British farming, and flies within the face of progress and funding.”

NFU chairman Tom Bradshaw mentioned: “This has been a devastating budget for family farmers.

“Shamelessly breaking clear promises on farm property relief will rob the next generation of British people of their ability to produce food, plan for the future and care for the environment.”

But the government said the change is expected to affect about 2,000 properties each year.

Following Wednesday's budget announcement, the government said it would maintain a £2.4 billion agriculture budget for England in 2025/26.

Food Security Minister Daniel Zeichner said: “Our dedication to farmers and the important position they play in feeding our nation stays agency.”

With inputs from BBC

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