The last harvest? How tax changes are impacting British farming
Britain’s food security hangs in the balance as agricultural land is lost to pay inheritance tax bills, writes Sarah Jordan
A recent survey carried out among 500 farmers and landowners by the Country Land and Business Association (CLA) has highlighted the far-reaching consequences of the Treasury’s plans to cut vital inheritance tax reliefs for farms and family businesses from April 2026.
Nearly 80 per cent of respondents said they are worried their business will not survive the next 10 years, while over 60 per cent have considered selling their farm and leaving the industry.
The Agricultural and Business Property Relief changes (APR and BPR) represent a seismic shift from tax-free succession to potentially crippling liabilities, transforming inheritance from a seamless transition into a financial crisis that could force the break-up of family farms – with the broader consequence that Britain’s food security hangs in the balance as agricultural land is lost to development or non-farming uses to pay inheritance tax bills.
Tax changes and farm finances
The immediate impact of these proposals will be substantial. To put it in perspective, if you owned a working farm valued at £10m and died today, the IHT liability would be zero. However, if you died on 6 April 2026, the IHT liability for that same farm could be £1.8m.
Given that many farm assets are illiquid, this tax burden leaves heirs having to decide between selling productive assets to settle the bill or taking on debt that threatens the viability of the business.
This really highlights the importance of succession planning to mitigate the impact. Previous plans which families have used for generations will need reworking in line with proposed incoming regulations to ensure that younger generations expecting to step in don’t find themselves closed out by tax bills.
Seeking professional advice from lawyers who understand agricultural life will be game changing for succession planning in the new tax landscape. Lawyers may take practical steps such as revising wills and trusts to reflect the changes or reviewing ownership structures and options for lifetime gifting to mitigate IHT liability. Ultimately, getting advice sooner rather than later gives you options and time to make decisions on your own terms, rather than in a panic once the legislation has changed.
The great British food shortage
Inheritance tax reforms don’t usually spark debate around supermarket shelves or the state of the nation’s diet.
However, given the UK currently imports around 40 per cent of its food, the question of whether we can feed ourselves in the future should be at the forefront.
Changes to the APR system will force countless farmers into an impossible choice: sell productive farmland to meet tax obligations or watch their family businesses collapse under the financial burden. Once sold, this land rarely remains in agriculture – instead flowing to developers, investors or buyers who could have no interest in food production.
While inheritance tax may appear to be a niche concern for the wealthy, its ripple effects will touch every household in Britain. As domestic food production shrinks, the nation becomes increasingly dependent on imports, exposing consumers to supply chain chaos, volatile pricing and the whims of international politics. What begins as a tax policy ends as a threat to national food security – turning Britain’s agricultural heritage into a luxury the country can no longer afford.
Looking ahead
The suggested tax proposals will change the foundations and resilience of British agriculture. While the government has announced provisions such as £5bn to help farmers produce food over the next two years – the largest amount ever allocated for sustainable food production – the sentiment amongst farmers is not only frustration but fear.
Prompt and careful succession planning can help mitigate the impact of the changes, which will in turn have a ripple effect on food production and security in the UK. The key will be turning to legal support and financial planners to ensure that any tax changes which crop up don’t result in uprooting of farms.
Sarah Jordan is partner in landed estates and farming at Moore Barlow