The protest against the changes to inheritance tax relief for agricultural land was organised by the National Farmers’ Union and saw 1,800 members speak to local MPs before speeches began around 11:30am on Whitehall in front of a rain-drenched crowd of 20,000.

The intention was to march to Westminster and back but due to the size of the crowd and the level of elderly and young this was stopped.

Conservative leader Kemi Badenoch insisted that ‘we know farming’, and that ‘we are the team that are working for you’, as well as saying ‘we have your backs’, as she pledged to reverse Chancellor Rachel Reeves’ imposition of inheritance tax at 20% from April 2026.

Badenoch said: ‘Farming is the backbone of this country, without it we cannot survive, we know that we haven’t always got it right, but this policy is so obviously unfair, so obviously cruel, we will do everything we can to make sure that in a few years’ time if they do not U-turn now, we will reverse this tax.’

However, only farms worth over £1m, which increases to £2m when dealing with a married couple, will be charged IHT. Additionally, the first £325,000 of any estate is inherited tax-free. This can then rise to £500,000 with the addition of the residential nil rate band if the estate includes a residence passed to direct descendants.

Along with politicians, and tractors, television presenter Jeremy Clarkson took to the stage to voice his opinions on the recently announced inheritance tax (IHT) charge on farmers, not only did he mention this, but the changes to double cab pick up trucks in the Budget.

He initially said that he thought farmers were prosperous, drove Range Rovers and went skiing every February, but since taking up farming five years ago he has realised just how hard it is. Not so much for himself, but those that struggle financially to keep up with the costs of machinery, chemicals, and animal feed.

Clarkson said: ‘I’ve come to understand just how unbelievably difficult it is, and complicated, dangerous, and cold, very cold! It’s the costs that staggered me, £200,000 for a medium sized tractor, a combine, half a million pounds, all the equipment costs a fortune.

‘For the sake of everybody here, and all the farmers stuck at home today paralysed by a fog of despair by what’s been foisted upon them, I beg the government to accept this was rushed through, wasn’t thought out, and was a mistake.’

The take in IHT to the Treasury per year is predicted to pull in just over £230m a year in 2026-27, rising to £495m in 2027-28 and will affect around 25% of farms, according to Treasury figures, but the Country Land and Business Association (CLA) disagrees with this, stating it believes that 70,000 UK farms could be affected by this change.

CLA said: ‘Family-run farms—typically asset-rich but cash-poor—would be forced at best into a cycle of stagnation, asset sales, or debt to cover this tax burden, threatening the long-term viability of the UK’s rural landscape and food security.’

However, the Department for Environment Food & Rural Affairs (DEFRA) stand by the fact that just 500 claims per year are expected to be impacted.

Chancellor Rachel Reeves and secretary of state for environment, food and rural affairs, Steve Reed said in a joint statement today: ‘Farmers are the backbone of Britain, and we recognise the strength of feeling expressed by farming and rural communities in recent weeks. We are steadfast in our commitment to Britain’s farming industry because food security is national security.

‘It's why we are investing £5bn into farming over the next two years – the largest amount ever directed towards sustainable food production, rural economic growth and nature’s recovery in our country’s history.

‘The reforms to agricultural property relief (APR) ensure that wealthier estates and the most valuable farms pay their fair share to invest in our schools and health services that farmers and families in rural communities rely on.’ 

Agricultural property relief was first introduced in 1984, allowing family farms to be exempt from IHT since then. Although a 20% charge is being introduced from April 2025, inheritors of farms are given 10 years to pay IHT bills, with no interest being accrued.

Prior to 1984, farming estates were subject to capital transfer tax (CTT), the same as any other estate being passed down in the country. Before this it was tax under estate duty. In 1980, the CTT rate was 40% on assets passed on after death and 20% on all lifetime transfers.

Julie Butler, founding director and farming tax expert at accountancy firm Butler & Co Alresford said: ‘With the elderly age of farm owners there is real financial risk and concern.

‘Based on client meetings and discussions to date as well as technical research, the latter is showing conflicting information on the interpretation of the existing APR restrictions to 50% APR, eg, AHA tenancies and also 50% BPR, eg, partnership properties.

‘Does that relief just remain at the 50% or does it reduce further to effective 25% relief on APR on tenancies and 25% BPR on partnership properties? One thing that everyone in the farming world seems to be agreeing on is that the potential farms caught will be higher than Rachel’s 25%.’

Slashed farming IHT relief causes farm revolt | 18 November 2024