New inheritance tax rules for farmers are the ‘final nail in the coffin’
Farmers now have to pay 20% tax to pass on their business to family
Last updated 31st Oct 2024
Farmers in Dumfries and Galloway are telling us new rules on inheritance tax will have a devastating impact on small family businesses.
Currently, all UK farms have a 100% tax relief meaning that they could pass on their land for free but at the Autumn Budget, it was announced by Chancellor Rachel Reeves that this is to change for anyone with an asset of £1 million or more in April 2026.
Those affected will have to pay 20% for inheritance tax.
Farmer Ben Best from Dalscone Farm in Dumfries says small sites will be heavily impacted.
“There are a lot of farmers who will be looking at things now and saying ‘What’s the point? It’s all going to be taxed anyway. Why not retire early and let it be somebody else’s headache?’ I can sympathise with them.”
‘It’s the beginning of the end’
He told Greatest Hits Radio that this just adds to the troubles that farmers already face:
“We’re in a really sticky situation now because as it stands, farmers now can’t even afford to die because the farm is going to be taken off them to pay for the tax bill. It’s just the final nail in the coffin.”
He adds that this will be the last straw for many:
“One of the main industries in Britain is farming and it’s one of the industries that we should be most proud of.
“Our farmers are world-leading and so innovative, and yet again, we’re being asked to carry the cross and it’s too much this time.
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“The 20% inheritance tax on farmers with assets over a million pounds signals it’s the beginning of the end.
“For farmers now, it may be a case of let’s sell up and move on because there is no point giving it all to the government.
“Farms that have been in the family for generations are now at risk and it’s a shame and disgrace.”
However, Chancellor Rachel Reeves insists this is a fair deal.
“Inheritance tax will be half the rate that middle-class families face so I think this a fair package, protecting smaller family farms but while asking some of those bigger landowners in tax.”
‘It’s a fair deal’
She adds that this will help close the financial black hole.
“Raising the money that is needed to fix our public services: our schools, our hospitals, our transport whilst also ensuring that our public finances are on a public footing. I think that is the right balance.”