Farmers oppose inheritance tax (specifically changes to Agricultural Property Relief) because it threatens the viability of family-owned farms, often forcing the sale of land or assets to cover large tax bills. Because farm wealth is tied up in land and equipment rather than cash, they argue it threatens intergenerational succession and food security.
Why do farmers not pay inheritance tax in England?
Agricultural Property Relief (APR) was introduced in 1984 to help farmers pass their land down through generations without having to pay IHT. It was introduced to ensure that farms were not forced to break up, thus allowing the land to remain in agricultural use.
Why are farmers protesting about inheritance taxes?
By protesting, what farmers are quite absurdly doing is demanding that those food companies and retailers continue to get the effective subsidy via the inheritance tax system that they now enjoy, and that is most definitely not a solution to any problem in the food sector right now.
While the prospect of the tax is already having an impact on farmers' confidence and their willingness and ability to invest, it is not expected to be legally in force until April 2026. The NFU will continue to use all its influence to campaign for the government to overturn the reforms to APR and BPR.
You can transfer certain agricultural property without paying Inheritance Tax, either while you are alive or through your will. To qualify for Agricultural Relief, the property must be used for growing crops or raising animals.
Farmers celebrate Keir Starmer's Christmas U-turn on inheritance tax
How many farmers will be affected by inheritance tax?
Of the 1,100 estates, up to 185 estates claiming agricultural property relief, including those also claiming business property relief, are expected to pay more inheritance tax in 2026-27. This a reduction from up to 375 estates forecast to pay more at Budget 2025.
How to give money to children without paying inheritance tax?
If you live seven years or more after giving a larger gift, there will be no tax to pay. This rule applies to any gift you give anyone. However, even if it is exempt from inheritance tax, any income or gains arising from it could have other tax implications for your children.
What are the main arguments against UK farm taxes?
Arguments against farmers paying inheritance tax: Impact on family-owned farms – some critics highlight that farms are small family run operations. Having to pay inheritance tax could result in families having to sell land or assets.
Protesters said inflation in food prices has not translated into fair returns for producers and accused supermarkets of exerting excessive power within the supply chain.
Background. The protests were a response to proposed changes to inheritance tax on agricultural assets, which media outlets dubbed as a "tractor tax". Previously, the intergenerational transfer of farms had been made exempt from taxation in 1992 by the Conservative Major ministry, to protect food security.
The NFU's central point is that the economics of farming mean levying inheritance tax could be ruinous for many. While farmers and agricultural landowners are asset-rich - courtesy of their land, property and equipment - they are cash-poor.
Can I put my house in my children's name to avoid Inheritance Tax in the UK?
In some cases, transferring your property to your children during your lifetime is the best way to pass on wealth and make sure that your heirs are adequately provided for. It can also be a useful way of reducing Inheritance Tax (IHT) or protecting the property from a future sale to fund care home costs.
For example, lifetime gifts of agricultural property made before a certain future date could be made inheritance tax free, regardless of the timing of the death of the giver, so that those farm owners who pass away in the next seven years have an opportunity to make tax-avoiding gifts in light of the Budget changes.
In simple terms, the receipts from Inheritance Tax are an income for Treasury, and are pooled with Income Tax, Corporation Tax and VAT to finance the expenses Government incurs. However, Inheritance Tax is part of a wider Taxation System which uses levers to encourage and discourage behaviours and redistribute wealth.
How to pass on unlimited amounts to your children and never pay inheritance tax?
A Potentially Exempt Transfer (PET) enables an individual to make gifts of unlimited value which will become exempt from Inheritance Tax (IHT) if the individual survives for a period of seven years.
HMRC generally doesn't know about gifts you make unless they're reported during the probate process after your death, as it's a self-declaration system, but your executor must declare all lifetime gifts (especially within 7 years) on the IHT400 form, using bank statements and inquiries to find them. Keeping detailed records of dates, amounts, and recipients is crucial to help your executor accurately report these gifts and avoid penalties for the estate.
Is it better to gift a property or put it in trust?
While the transfer into trust of a property that is occupied by the homeowner will rarely achieve any inheritance tax advantage; there may be inheritance tax benefits to giving away an investment property – particularly if it is producing an income that is surplus to the needs of the property owner and so is ...
What is the best way to gift money to an adult child?
The best way to gift money to an adult child involves clear communication and considering tax implications, with popular methods including direct bank transfers, helping fund specific goals like a home deposit or retirement (like a 401(k) match in the US or ISA/LISA in the UK), or regular gifts from surplus income for Inheritance Tax (IHT) benefits, always keeping good records. For substantial gifts, ensuring the child understands it's not a "blank check" and setting expectations helps avoid future issues, while formalizing large gifts, especially for property, can protect the funds in case of divorce.
