For greater than 100 years, the household of 56-year-old Andrew Smith has had a cattle farm on Bodmin Moor in Cornwall. Smith, who now runs the farm, sees chancellor Rachel Reeves’s adjustments to inheritance tax guidelines as a grave betrayal of British farmers.
Working along with his three sons, the farm produces about 2,000 sheep and 30 to 40 cows annually, but makes “no profit”, he says. “We just pay the bills.”
Final Wednesday, Reeves introduced that, from April 2026, farms and different enterprise property, which had been handed on to heirs tax-free, will fall inside inheritance tax (IHT). Inheritors must pay 20% of their worth above £1m, half the headline inheritance tax price of 40%.
“The boys have been in the business with me since they left school,” Smith says. “They have been bred to look after stock on the moors, which is a very difficult terrain to earn a living on. They were expecting to take it over from me, but this is the final nail in the coffin for family farms.”
“Once my sons are gone, you can’t replace them, nobody else will have the experience on these hills, the food will just not get produced. It’s the end of the line.”
Smith believes that the truth that UK household farming as we speak is by default asset-rich however cash-poor has been solely ignored by the chancellor’s new guidelines.
“If my farm is worth £5m, my sons won’t be able to pay £800,000 in inheritance tax, of course, they’ll just have to sell half their land when I die. Then the farm will be unviable. Starmer has 100% broken a promise; they lied.”
Smith is certainly one of scores of farmers who responded to a Guardian callout asking in regards to the deliberate adjustments. They raised issues that Labour’s coverage will hurt household farms, power them to cease meals manufacturing, stop funding in new applied sciences and break the chain between farming generations.
Many stated the coverage would imply promoting off land to bigger, company agricultural companies, or traders with restricted curiosity in environmental issues or communities and who would most likely, as one farmer put it, “simply watch balance sheets”.
The Nationwide Farmers’ Union has labelled the plans “disastrous” for the business. The federal government stated the change will solely have an effect on about 2,000 estates a 12 months.
‘Why do we bother to produce food?’
Jonathan Bell’s household has been concerned with farming going again at the least to his great-grandfather. In 2018, he started operating the 250-acre Devon farm in partnership along with his spouse and oldsters.
“Rachel Reeves has destroyed our farm business and also our cold-pressed rapeseed oil business,” says Bell, 55.
Bell estimates that the household may face a £400,000 inheritance tax invoice. “On a business making £30,000 profit, there is no way I could service a debt of that magnitude,” he says. “We would have to sell part of the farm, making us even more uneconomical,” elevating the “very sad” risk of being compelled to surrender farming solely.
“We work in one of the most dangerous professions in the country to produce food to feed everyone,” he says.
Bell says the adjustments harm as a result of farming is as a lot a service for the nation as an business. “We look after the countryside and provide the food to keep people alive,” Bell says. If that is how the federal government treats farmers, he feels, “Why do we bother to produce food?”
‘Good in principle, but the threshold is too low’
Andrew Brown, from Rutland within the East Midlands, owns about 100 acres of land, however he’s primarily a tenant farmer producing wheat.
He feels extra ambivalent about Reeves’s new guidelines. “I think this is ultimately a good idea, because some of the very, very rich landowners aren’t farmers, they’re people who just bought land to take advantage of the IHT rules.
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“So, if this stops very wealthy people from buying farmland to avoid taxes, then all the better, as those people could afford to pay the tax anyway,” he says.
“I don’t disagree with the principle, but there were better ways of doing it. The threshold is too low, which will affect a lot of people, and it should be gradual, so 5%, say, for up to [a farm value of] £5m, then 10% until £10m, and so on, to a maximum inheritance tax rate of 50% for farms worth over £50m. That would have been fairer.”
‘If you sell the farm, you lose the home as well’
When Gerallt Lloyd was rising up on his dad and mom’ dairy, sheep and beef farm close to Aberystwyth, he remembers pouring out recent cups of cow’s milk to drink.
A long time later, Lloyd, now 47, nonetheless works for his 77-year-old father on the identical land in west Wales, and hoped sooner or later to cross it on to his youngsters, aged 17 and 14. He owns 120 acres, however as well as rents 150, which he says “helps to make the farm viable”.
However Lloyd fears the chancellor’s resolution to vary agricultural property aid will imply his youngsters might be disadvantaged of that chance.
“It feels awful,” says Lloyd, who estimates being hit with a tax invoice of about £100,000 when he takes over from his father. “This could be the death knell for many family farms.”
Lloyd says it’s “a pity they’ve put this threshold at such a low point. I know £1m sounds like a lot,” however the proposals will principally hit small farms and will have focused belongings upwards of £3m or £5m, he says.
The prospect for Lloyd, he says, is doubtlessly promoting parcels of the land he grew up on to account for the tax payments. “And farming is different to many other businesses, it’s also a home,” says Lloyd, whose spouse and oldsters dwell on the farm. “They’re not big or expensive houses, but they’re a roof over our heads. If you have to sell the farm, or part of it, you lose the home as well.”
