A Wave of Relief on the Farm with the Inheritance Tax Change
In Tebay, Cumbria, a small hill farm faced an inheritance tax bill of about £59,000 per year for 10 years under the previous rules. On 23 December, the government raised the inheritance tax threshold for land and assets from £1 million to £2.5 million, providing much-needed relief for small farms like theirs. This change eases fears over the farm's viability and allows the family to continue their farming work without dread for the future.
Small hill farms contribute significantly to local communities but often do not generate large profits. Farmhouses frequently fetch high prices, and some farms are sold for holiday lets or developed as large residences; for instance, a nearby farm is currently for sale at £2.35 million as holiday cottages. Under the old £1 million threshold, farms like theirs risked being sold to owners with different priorities who may lack ties to the community.
There are broader concerns about farming finance, with government payments or tax breaks sometimes going to landowners who neither contribute to the local community nor work with local farmers. The family farm in Tebay is home to three generations who hope to pass the land on while restoring wildlife habitats and biodiversity. They emphasize that public money should support public goods to sustain farms as vital rural infrastructure.
