Farmers are fearing for their future because of tax raid (Image: Getty)
Rachel Reeves has been urged to carve out an exemption for older farmers “snared” by her inheritance tax trap as protesters prepare for a mass demonstration.
Organisers of a mass rally next Wednesday have pleaded for a “limited amnesty” for older and sick business owners who lack time to put their affairs in order.
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Farmer Martin Williams said: “Since last November, farmers have been warning the Chancellor and the Prime Minister that there will be an acute short-term impact on some of the most vulnerable people in our sector.
“People who know they are running out of time have absorbed the Government’s message that if they die before April next year, their successors will pay no tax.
“If they die after that date, they may have a bill so large it will lead to the break-up of the business they spent their life building.
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“That is creating a dangerous incentive for people to do the unthinkable and it needs to be rectified even if the overall policy stands in the long term.”
Farmers will descend on Westminster next week to urge Ms Reeves to amend her policy so that some people in poor health can transfer assets.
The National Farmers' Union has also proposed a clawback scheme that would mean tax is only charged once a farm is sold, rather than on inheritance.
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Speaking to reporters on Wednesday, Environment Secretary Steve Reed said: “The Chancellor has been very clear about that policy. It has been set and it’s not going to be changed.
“I recognise the anguish that people feel about that change. It wasn’t something that we intended to do before the General Election. The circumstances we inherited means that we had to take decisions that we weren’t planning to take.”
In her October Budget, the Chancellor announced that from April 2026, combined agricultural and business property assets of more than ￡1million will be taxed at an effective rate of 20%. Anything below that will still receive 100% relief.
The Daily Express has demanded a U-turn through its Save Britain’s Family Farms crusade.
It comes as figures showed 30% of farms failed to make a profit in 2023-24, compared with 17% of farms in 2022-23.
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Mr Reed said: “If you look at the situation in farming, the problem they face isn’t a recent change to inheritance tax. It’s the fact that over years now, that sector doesn’t make a profit.
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"You’ve got people who get up before dawn and they work until late at night six days a week – sometimes more than that – and they don’t make any money for all that work. You cannot have a sector that doesn’t make profit having a bright future.”
He insisted the Government planned to “pull every single lever we can” to make the sector profitable.
Mr Reed added: “I’ve said directly to farmers I’m very sorry. We said something before the election but the circumstances changed. So what we were doing had to change. The real problem that farmers face is that they don’t make a profit in their businesses, or far too many of them don’t.”