A heated dispute has erupted between the National Farmers’ Union (NFU) and the Treasury over the number of farms set to be impacted by the government’s controversial changes to inheritance tax rules. The disagreement centers around the removal of the Agricultural Property Relief exemption for farms valued at over £1 million, a move that has sparked fury among the UK’s farming community.
Treasury’s Figures Challenged by NFU
While the Treasury claims that a mere 28% of farms will face the new inheritance tax burden, the NFU argues that the government’s own Department for Environment, Food and Rural Affairs (Defra) data paints a starkly different picture. According to the union, Defra’s figures suggest that a staggering 66% of farms could be affected by the Agricultural Property Relief changes.
The discrepancy, the NFU asserts, stems from the Treasury’s reliance on outdated data that fails to account for the true value of many of the nation’s farms. In contrast, the union maintains that the Defra data, collected recently as part of the post-Brexit subsidy application process, provides a more accurate representation of the current state of UK agriculture.
Farmers Blindsided by Policy Shift
Adding fuel to the fire, NFU President Tom Bradshaw revealed that farmers were caught off guard by the inheritance tax overhaul, as Environment Secretary Steve Reed had previously assured them that no changes to Agricultural Property Relief were on the horizon. This lack of forewarning, Bradshaw argues, has left many farmers unprepared to navigate the complex new tax landscape.
“They do not understand the immediate impacts this is having on intergenerational farms,” Bradshaw lamented. “Some very, very concerned successful businesses have a parent involved who is in their 80s but the person running the farm is in their 50s. The assets are still in the ownership of the older family member.”
The NFU leader went on to describe the plight of farmers with elderly relatives in ill health who may not survive the seven-year gifting period required to avoid the new tax burden. “It is unbelievable the pressure they are putting on the industry,” he said. “To make this change now, to rip the rug out from under the farming industry, I don’t see how they can justify it.”
Threat of “Militant Action” Looms
Perhaps most alarmingly, Bradshaw warned that the “outrage from rural communities is like nothing we have ever seen before,” with some farmers even discussing the possibility of “militant action” in response to the inheritance tax shake-up. While the NFU typically advises its members against protesting, Bradshaw conceded that the union may no longer be able to discourage such measures given the unprecedented level of anger and frustration among farmers.
The intensity of the backlash against the inheritance tax changes is evident in the more than 190,000 signatures gathered on a petition opposing the new rules. As the NFU prepares for a mass lobby of MPs, it remains to be seen whether the government will heed the growing calls to revisit its controversial policy and engage in meaningful consultation with the agricultural sector.
Government Defends Policy, Vows to Work with Farmers
In response to the mounting criticism, a government spokesperson sought to reassure farmers that “the vast majority of those claiming relief will not be affected by these changes” and that they will still be able to pass their family farms down to future generations. The spokesperson described the new inheritance tax rules as “a fair and balanced approach that protects the family farm while also fixing the public services that we all rely on.”
Despite the government’s assurances, the NFU remains unconvinced, arguing that the Treasury’s assumptions fail to account for the diverse circumstances of farm business owners across the country. As Nick von Westenholz, the union’s policy chief, explained:
“In a very best-case scenario with spouses using all of their allowances it’s true they can claim up to £3m, but in most instances that will not be the case. Not all farm business owners are married. One of the spouses could have other assets which use up the £1m threshold. So it is not a reasonable figure to say that it will be available for most farms.”
As the battle over inheritance tax rages on, the fate of countless family farms hangs in the balance. With emotions running high and the threat of rural unrest looming, policymakers must navigate a treacherous path forward, seeking to strike a delicate balance between fiscal responsibility and the preservation of the UK’s vital agricultural heritage.
Only time will tell whether the government and the farming community can find common ground in this bitter dispute, but one thing is certain: the stakes for the future of British agriculture have never been higher.
