Family Farms or Tax Havens? The Debate Over Farmland Inheritance

A picturesque view of Roseberry looming over the Cleveland Vale, a landscape dotted with the usual mix of arable and livestock farming. A typical lowland farm grows wheat, barley, and oilseed rape while also rearing cattle and sheep. These farms are mostly family-run or tenanted, though one suspects that “family-run” has a rather flexible definition when it suits.

Farmers are still in an uproar over the proposed 20% inheritance tax on farmland, claiming it to be an unbearable burden—although, with proper tax advice, many will likely avoid it. The National Farmers’ Union has chosen an example to stir sympathy: a £340,000 tax bill for inheriting a 300-acre farm valued at £4 million, should the owner die after April 2026. However, the NFU is noticeably vague on where the line should be drawn. Should inheritance tax apply to Jeremy Clarkson’s 1,000 acres, worth £10 million? Andrew Lloyd Webber’s 5,000 acres, worth £50 million? Or James Dyson’s 36,000 acres, valued at £360 million? All three are loudly protesting the changes, so does the NFU consider them “family farmers”?

The tax could be spread over ten years or mitigated by selling part of the land tax-free, thanks to capital gains relief. The Chancellor’s aim is to prevent the wealthy from using farmland as a tax shelter, which, in theory, should make land more accessible to actual family farmers—though whether that happens remains to be seen.

Meanwhile, the government has unveiled a collection of policies and investments designed to improve farming profitability. Some have been announced before, some are new. If you care to know more, read the latest press release. It will be interesting to see whether any of this actually makes the headlines.