Farmers protest inheritance tax changes

Farmers will return to central London today for a “Pancake Day rally” to protest changes to inheritance tax. The protest will begin at midday with a march from Whitehall towards Parliament, and the demonstration is expected to conclude at 3pm. This marks the latest chapter in farmers’ ongoing resistance to recent government proposals which could have significant implications for agricultural land and its owners. The protest comes in the wake of the Government’s consultation on how changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) will apply to trusts.

Tom Gauterin, tax and agricultural lawyer at Freeths, says, "The farmers’ latest protest comes hard on the heels of the publication of the Government’s consultation on how the changes to APR and BPR will apply to trusts. This consultation is concerned with the technical detail of how the new policy will work. Concerningly, there is no sign at all that the Government has listened to any of the wider points raised about the effect of limiting the scope of APR and BPR available to farms and other businesses."

The consultation has raised concerns among farmers, as it looks to implement changes that would limit the inheritance tax reliefs currently available to farming estates. Gauterin pointed out that the original policy, intended to target investors using farmland for tax avoidance, was based on flawed assumptions, failing to account for the real challenges faced by working farms. He added, "To recap: the original policy - ostensibly intended to target investors using farmland as a tax sheltering device - was based on incorrect assumptions (farms are not the same as death estates, and most farming estates will claim BPR in preference to APR), and appeared to take no account of the reality that the high capital values of farms are wildly out of sync with their (notoriously limited!) income generating potential."

As a result of these proposed changes, some farmers may be forced to sell their land. Gauterin warned, "As things stand, it is likely that some farmers will bow to the inevitable and sell up. There is no guarantee that agricultural land will continue to be used for food production post-sale, so this has far-reaching implications for the UK’s food security – a point that has been notably absent from any Government comments."

Farmers, advisors, and industry experts are calling for more sensible alternatives. Gauterin suggested two potential solutions, including tightening the definition of a "working farm" or implementing a full exemption on death with a clawback mechanism if the farm is sold within a specified period. He concluded, "This policy remains a blunt instrument that might have been designed to make farms go to the wall. Multiple tax advisors have proposed alternatives that would more effectively target investors without harming active farmers."

The protest today is part of a wider movement to address the unintended consequences of the inheritance tax changes and to ensure that UK farming remains viable for future generations. As the clock ticks down to the deadline of 6 April 2026, it may still be advantageous for farmers to transfer their farms into trust, as the ongoing charges of up to 3% every ten years could be more manageable than the alternative tax burden.

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