The recent inheritance tax reforms have sparked significant controversy within the farming community. The changes, set to take effect in April 2026, will see a reduction in Agricultural Property Relief (APR) and Business Property Relief (BPR), limiting full relief to the first £1 million of combined agricultural and business property. Above this threshold, a 50% relief will apply, resulting in an effective inheritance tax rate of 20%. While the government argues that these reforms will target only the wealthiest estates, many farmers fear that the changes will jeopardize the future of family farms.
Objections to the Reforms
Farmers across the UK have voiced strong objections to the proposed changes. The National Farmers Union (NFU) has been at the forefront of this opposition, organizing protests and lobbying efforts to highlight the potential impact on family farms. Farmers argue that the reforms fail to consider the unique financial challenges they face, such as tight profit margins and high production costs. Many fear that the increased tax burden will force them to sell their farms, leading to a loss of generational knowledge and a decline in local food production.
Several major supermarkets have voiced their objections to the inheritance tax (IHT) reforms. Tesco, Lidl, and the Co-op have been particularly vocal in their opposition. These supermarkets have supported calls for a pause in the implementation of the changes and have urged the government to conduct a full consultation with the farming community.
Tesco’s chief commercial officer, Ashwin Prasad, emphasized the need for certainty and long-term vision for UK agriculture. Lidl highlighted the importance of British-sourced produce and the need for security and investment in the agricultural sector. The Co-op’s managing director, Matt Hood, stressed that farmers are the backbone of the UK’s food supply and pledged support for the industry.
It’s great to see supermarkets standing in solidarity with farmers on this issue.
The Work of the NFU
The NFU has been instrumental in rallying support for farmers and raising awareness about the implications of the inheritance tax reforms. Through petitions, protests, and meetings with government officials, the NFU has sought to convey the urgent need for a reconsideration of the proposed changes. The union has also engaged with the public, encouraging them to support British farming and understand the vital role that farmers play in the nation’s food security.
Supermarkets’ Role in Farm Succession
Supermarkets have a significant role to play in supporting farm succession and ensuring the sustainability of the agricultural sector. By sourcing produce from local farmers and promoting British-grown food, supermarkets can help create a stable market for farm products.
How We Can Help
At Farm and Country Finance, we understand the challenges that farmers face in navigating the complexities of farm succession. Contact us today to learn more about how we can support your farming business in the arrangement of farm finance, farm loans, farm mortgages, farm remortgages, agricultural mortgages and agricultural remortgages.