More than 20,000 farmers and supporters descended on Westminster on Tuesday to protest against Government plans to bring in 20 per cent inheritance tax on properties valued above £1 million.
The Government says that, depending on people’s individual circumstances, up to £3 million can be passed on free of inheritance tax. Anything beyond that will be taxed at 20 per cent, rather than the usual 40 per cent normal rate of inheritance tax.
This tax can be paid tax-free in instalments over 10 years, rather than immediately. And if transfers to individuals are made more than seven years before death, those will continue to fall outside the scope of inheritance tax in the normal way.
Ministers say they aim to better target these reliefs to make them fairer, protecting small family farms. They point to figures showing that the top seven per cent (the largest 117 claims) account for 40 per cent of the total value of agricultural property relief. This costs the taxpayer £219 million. The top two per cent of claims (37 claims) account for 22 per cent of agricultural property relief, costing £119 million.
However, the measures announced in the recent Budget have prompted widespread anger among farmers, and Mr Stuart, who has been highly vocal on the issue, has raised it in Parliament, spoken with local farmers over the past few weeks, and organised a petition against the measures which he said had reached more than 760 signatures in its first week.
As 20,000 farmers and supporters descended on London, Mr Stuart took the opportunity to work with the NFU to invite about 20 farmers to tell him and Bridlington and the Wolds MP Charlie Dewhirst about their experiences, and what the next steps should be.
They said it was clear that farmers could be devastated by these measures, with everyone in the room farming land that would eventually be subject to inheritance tax, making for a “grim future” for family farms in East Yorkshire.
Despite the Chancellor claiming that 73 per cent of farms would be unaffected, the MP said that was simply not the reality of farming in the UK.
He said: “Excluding farms under five acres, the average size of a farm in the UK is 250 acres, according to the NFU – and with land prices at around £10,000-£15,000 an acre, the issue is clearly much bigger than the Treasury estimates.
“At present, farms benefit from Agricultural Property Relief and Business Property Relief, which means farms can be passed from one generation to the next entire, without the land being subject to inheritance tax of 40 per cent.
“Going forward, I will work with local farmers to press the government at every opportunity, making the case that family farms aren’t like any other business – just as Sir Keir Starmer said to the NFU Conference in 2023.
“I don’t know who dreamt up this scheme to tax the family farm out of existence, but whoever they are doesn’t have any experience of rural life.
“It takes a special incompetence and cruelty to hammer those who feed us and make it impossible for family farms to continue.
“These aren’t plutocrats, they’re hard-working people who are out every day, in the freezing cold, to put food on our plates and supermarket shelves for very little money.
“Labour is pulling the rug from under farmers’ feet and if Labour doesn’t reverse this, it’s everyone in the country who will pay the price.”
Strength of Feeling: Crowds gather in Westminster and, below, MP Graham Stuart with local farmers at his street surgery in Skirlaugh last Saturday.
In a statement, Chancellor Rachel Reeves and Environment Secretary Steve Reed said: “Farmers are the backbone of Britain, and we recognise the strength of feeling expressed by farming and rural communities in recent weeks. We are steadfast in our commitment to Britain’s farming industry because food security is national security.
“It’s why we are investing £5 billion into farming over the next two years – the largest amount ever directed towards sustainable food production, rural economic growth and nature’s recovery in our country’s history.
“But with public services crumbling and a £22 billion fiscal hole that this Government inherited, we have taken difficult decisions.
“The reforms to Agricultural Property Relief ensure that wealthier estates and the most valuable farms pay their fair share to invest in our schools and health services that farmers and families in rural communities rely on.”
