Sunday, December 22, 2024

UK farmers rally to oppose government’s inheritance tax reforms

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British farmers called on the government on Tuesday to revoke a contentious proposal to alter inheritance tax laws for land ownership, threatening to jam the streets of London.

Farmers drive their tractors past the Houses of Parliament during a protest against issues including substandard food imports, in London, UK, on Monday, (Bloomberg)

In the past, farming enterprises were eligible for a 100% inheritance tax exemption on commercial and agricultural property, which decreased the amount that landowners and farmers had to pay when acreage was transferred after a death.

From April 6, 2026, however, total exemption from death duties will only apply to the first £1 million ($1.27 million) of combined agricultural and business property.

The Labour government has faced a furious backlash from farmers since the change was announced by finance minister Rachel Reeves last month, with even tech billionaire Elon Musk wading in on the row.

Musk, who has been critical of Prime Minister Keir Starmer, on Monday claimed on his X social media platform that “Britain is going full Stalin”, in an apparent reference to Soviet leader Joseph Stalin’s forced collectivisation of privately owned farms.

He shared a Guardian newspaper comment piece that accused farmers of having “hoarded land for too long”, and argued the inheritance tax change could break up farms and give younger farmers a chance to buy land.

The National Farmers Union (NFU), which represents more than 45,000 members in England and Wales, said its “mass lobby” of parliament will help explain the effects of the policy change on farms, farming and food supply.

It is expecting some 1,800 members to take part from 0900 GMT, with thousands more to turn up at a rally in nearby Whitehall.

“This awful family farm tax has to be overturned,” NFU president Tom Bradshaw said in a video message to members.

“The evidence that this decision is based on is weak. Even the government can’t agree between Defra (the Department for Environment, Food and Rural Affairs) and Treasury whether the figures are accurate.”

The dispute revolves over how many individuals may be harmed.

Prime Minister Keir Starmer announced on Monday that “the vast majority of farms” will be unaffected.

The government believes that the true threshold for paying inheritance tax may be as high as £3 million ($3.8 million), if exclusions for each spouse in a married and agricultural property are taken into consideration.

The Treasury maintains that this means as such nearly three-quarters of farms would not be liable to pay death duties.

The NFU cites Defra data showing that 66% of farm companies in England have a net worth of more than £1 million to support their claim that more farms may be required to pay the tax when land, property, and equipment are excluded.

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