Farmers Bewildered and Frightened by Inheritance Tax Reforms
The Farming Profitability Review has identified inheritance tax (IHT) reform as the single biggest issue facing farmers today. From next April, farms with assets valued over £1 million will be subject to a 20% inheritance tax, removing previous exemptions that had shielded many farms. This change has prompted thousands of protests in London over the past year, with farmers warning that the IHT payments could threaten the viability of smaller farms.
The review, authored by Baroness Minette Batters, contains 57 recommendations aimed at improving farming profitability. However, it does not propose any changes to inheritance tax within its terms of reference. The report also highlights the significant threats posed by climate change to farming and notes that agriculture accounts for around 70% of total UK land.
Among its recommendations are suggestions to grow Brand Britain through increased exports and to improve monitoring to ensure fairness throughout the supply chain. Additionally, the Department for Environment, Food & Rural Affairs (DEFRA) has announced the creation of a Farming and Food Partnership Board. This new board will coordinate efforts across farming, food production, retail, finance, and government to strengthen food production in the UK. Environment Secretary Emma Reynolds emphasized the benefits this will have for national food security.
Furthermore, a comprehensive 25-year Farming Roadmap, outlining the full government response to the review, is expected to be published next year.
