Inheritance tax change will mean older farmers 'feel like a burden', warns Devon farmer

A Devon farmer has warned the government's changes to inheritance tax will mean the older generation of farmers "feel like a burden on their heirs", which will take "a huge emotional toll" on those who might not have long left.

In a letter to ITV West Country, they said farmers feel "betrayed" by the government's announcement in the Budget, that will require farmers to pay 20% inheritance tax on farms valued at more than £1 million. With other tax allowances taken into consideration, it's believed the threshold will stand at £3 million.

"To people who do not have a clear understanding of the economics of agriculture, the value of the assets involved must seem incredible. That those assets can be passed on, tax free, between farming family generations may seem unfair - but here’s why," the letter opened.

As it stands, farms are almost entirely exempt from inheritance tax - a policy put in place to keep them in business. Currently they can take advantage of Agricultural Property Relief (APR) and Business Property Relief (BPR).

But in the Budget at the end of October, the Chancellor Rachel Reeves said the reliefs together will, from the end of March 2026, be capped at £1 million.

The government has maintained since the announcement that Treasury figures show around 500 of the wealthiest landowners will be hit by the changes, but the figures have become the subject of a fierce dispute. The Country Land and Business Association (CLA), for example, believes tens of thousands of farmers might be impacted.

"Since the 1940s farmers have done successive government's bidding," the anonymous letter reads.

"Plough up the moorlands, drain the wetlands, use artificial fertilisers and pesticides, rip up hedges, all to keep this country fed."

It continues: "Why do farmers feel so betrayed? Apart from Steve Reed [the Environment Secretary] saying there will be no alteration of APR as late as this year, and the previous government underspending the agricultural budget, and signing off on some poor trade deals, there is an unwritten covenant between farmers and growers and the government.

"We work hard to produce food in the manner in which the policy of the day demands, for very little profit.

"The government gets a well-fed population. As the saying goes: 'We are only six meals from anarchy'. The consumer gets safe, inexpensive food that's produced to some of the highest standards in the world."

Darren Jones: Labour's promise not to change inheritance tax for farmers 'wasn't a manifesto commitment'

APR allows farmers to make long-term investments, safe in the knowledge that their family and successors will benefit long into the future.

According to latest government figures, farming income across the South West fell by almost £300 million last year, partly as a result of extreme weather and rising costs.

"The chancellor stood up and said 'invest, invest, invest'. This APR revision will drastically reduce investment, as people save for pensions and don't commit to long-term investment as the farm may not stay in the family," the Devon farmer said.

"The immediate human toll is on the older generation, or people with life-shortening conditions. They expected to be able to own the asset, take a drawing or salary until they die, and pass on the asset with no taxation - as has been most financial advice since 1984.


"Now they are stuck. Unlikely to live for seven years and take advantage of gifting the asset to their heirs, they now feel like a burden to their heirs as upon their death huge IHT bills will land on the next generation's lap.

"This is taking a huge emotional toll on that older generation. At the very minimum this government must allow time so that these people are not caught in a tax trap."

Darren Jones, the Treasury's deputy, told ITV West Country after the farmers protests in Whitehall this week that "it wasn't a manifesto commitment" not to change the rules around paying inheritance tax.

This comes despite Steve Reed telling farmers before the election that Labour had "no intention" of changing APR.

"What Steve Reed didn't know before the election was the mess that we found in the public finances," Darren Jones said on The West Country Debate.

"We can't get back to fiscal and economic stability without getting a grip of public finances."

The government is remaining firm in its position that the changes will be rolled out in full, despite reports that the Treasury is consulting on making changes - like increasing the threshold or excluding certain age groups.

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