Typical family farm ‘would have to spend 159% of its profits for a decade to pay inheritance tax’, says rural land group
A typical family farm would have to put 159% of annual profits into paying the new inheritance tax every year for a decade and could have to sell 20% of their land, according to new analysis.
Chancellor Rachel Reeves announced in her 30 October budget farms would no longer get 100% relief on inheritance tax, and from April 2026 will have to pay 20% tax on farms worth over £1 million.
The announcement has sparked anger among farmers who argue this will mean higher food prices, lower food production and having to sell off land to pay for the tax.
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Ministers said the move will not affect small farms and is aimed at targeting wealthy landowners who buy up farmland to avoid paying inheritance tax.
However, analysis by the Country and Land Business Association (CLA), which represents owners of rural land, property and businesses in England and Wales, found a typical 200-acre farm owned by one person with an expected profit of £27,300 would face a £435,000 inheritance tax bill.
The plan says families can spread the inheritance tax payments over 10 years, but the CLA found this would require an average farm to allocate 159% of its profits each year for a decade.
To pay that, successors could be forced to sell 20% of their land, the analysis found.
Farmers protested against the plan outside a farming conference in Northumberland. Pic: PA
The CLA said their model shows how family farms, which are mostly asset-rich but cash-poor, would be forced into a cycle of stagnation, asset sales or debt to cover the tax.
This would threaten the long-term viability of the UK’s rural landscape and food security, the association said.
The government has said other tax relief will still apply to farmers, so if a married couple owns the farm they can pass on the land and property valued up to £3m to a child or grandchild tax-free.
This is made up of the £1m each of agricultural property allowance plus £500,000 each in standard tax-free allowance for passing on an estate worth less than £2m to children or grandchildren.
The CLA’s analysis found a 250-acre arable farm owned by a couple with an expected annual profit of £34,130 would still face an inheritance tax bill of £267,000 – 78% of its profit each year over a decade.
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Gavin Lane, deputy president of the CLA, said: “Either the government isn’t being honest with the public about the true impact of these reforms, or they don’t understand the nature of rural businesses.
“I’d like to believe it is the latter and that they are prepared to listen to our input rather than continually trying to dismiss it.
“While they frame this as a tax on the wealthy, the reality is that ordinary family farms will be hit just as hard.
“Asking farms to use their income to pay a huge capital tax bill over 10 years, if indeed it is possible, will threaten the future of investment and the viability of the business.”
File pic: iStock
The Treasury said the change will make inheritance tax relief “fairer, protecting small family farms”.
An explanation of the plan on the government’s website said the top 7% (the largest 117 claims) of agricultural property relief claims account for 40% of the total relief, costing the taxpayer £219m.
The top 2% of claims (37 claims) account for 22% of agricultural property relief, costing £119m, it says.
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“It is not fair for a very small number of claimants each year to claim such a significant amount of relief, when this money could better be used to fund our public services,” the website adds.
It also says the chancellor announced £5bn to help farmers produce food over the next two years, alongside £60m for the Farming Recovery Fund to help farmers recover from the impact of flooding.
Sky News has contacted the Treasury for a comment on the latest analysis.
UK
Liverpool fan says his baby was flung 15ft in his pram and his partner run over during trophy parade
A father has told Sky News how his partner was driven over, and his baby son was flung 15ft in his pram, after they were hit by a vehicle during the Liverpool parade collision.
Daniel Everson, 36, had been with Sheree Aldridge and their five-month-old baby, Teddy, at Liverpool FC’s victory parade on Monday.
“The best day of my life turned into worst”, said Daniel, a lifelong fan of ‘The Reds’.
Daniel described the moment the car came towards him and his family.
“I tried to hold on to the front of the car and try and stop it, push it, do whatever I could [to stop it] from hitting my partner and my baby.
Daniel Everson was in the crowd for the Liverpool trophy parade when the incident took place
“Me and my partner were flat on the roof, on the bonnet… we were just both trying to hold on for dear life with Ted next to us.
“And my partner went under the wheels of the car, of the front of the car, and it rolled over her leg, and I just bounced off to the side, but my boy and his pram got bounced totally in the opposite direction – about 15ft down the road.
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“As soon as that happened, I just started screaming for my partner, and I found her and I asked where Teddy was, and she didn’t know… and I found him and he was okay, thank God.
“He was in the road, in his pram, on his back, and I grabbed him. I chucked the pushchair to the side and I ran up to some paramedics with him.”
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The suspect is being held on suspicion of attempted murder, dangerous driving and drug driving.
Daniel, from Telford, said he felt like he was in “hell” as he rushed back to find Sheree.
“I had to carry her up the road with four police officers holding her while she was screaming and crying. At that point, I didn’t know what was wrong with her, but I could see the injuries to her leg,” he explained.
Sheree, 36, is recovering at Aintree University Hospital after suffering muscle tissue damage. Daniel has been allowed to return home with Teddy after he was assessed at Alder Hey Children’s Hospital.
“I feel a lot of emotions right now. Upset, angry, traumatised. A lot of unanswered questions that need to be answered.
“To me, it just wasn’t handled properly – the situation with the car getting that far into the crowd, in my opinion, he should not have got anywhere near us.”
Merseyside Police have now been given more time to question a 53-year-old arrested after a car struck a crowd at Liverpool FC’s victory parade on Monday.
The suspect, who police have described as a white British man from the local area, is being held on suspicion of attempted murder, dangerous driving, and drug driving.
Police have said the extra time they have been given to question the suspect runs into Thursday.
Andrew Tate and his brother Tristan Tate have been charged with rape and other offences in the UK.
Andrew Tate, 38, faces 10 charges, including rape, actual bodily harm, human trafficking and controlling prostitution for gain, relating to three women.
His brother Tristan Tate, 36, faces 11 charges relating to one woman – including rape, actual bodily harm and human trafficking.
The charges were authorised in January 2024, but full details have only been released now.
Bedfordshire Police issued an international arrest warrant for the brothers over allegations, which they “unequivocally deny”, said to have occurred between 2012 and 2015.
The Tate brothers are facing separate allegations of trafficking minors, sexual intercourse with a minor and money laundering in Romania.
They are also accused of human trafficking and forming a criminal gang to sexually exploit women in a different case, which has been sent back to prosecutors.
They are due to be extradited to the UK following the conclusion of proceedings in Romania.
Andrew Tate and his brother Tristan outside a Bucharest court in January. File pic: Inquam Photos/Octav Ganea via Reuters
A Crown Prosecution Service (CPS) spokesperson said: “We can confirm that we have authorised charges against Andrew and Tristan Tate for offences including rape, human trafficking, controlling prostitution and actual bodily harm against three women.
“These charging decisions followed receipt of a file of evidence from Bedfordshire Police.
“A European Arrest Warrant was issued in England in 2024, and as a result the Romanian courts ordered the extradition to the UK of Andrew and Tristan Tate.”
The spokesperson added: “However, the domestic criminal matters in Romania must be settled first.
“The Crown Prosecution Service reminds everyone that criminal proceedings are active, and the defendants have the right to a fair trial.
“It is extremely important that there be no reporting, commentary or sharing of information online which could in any way prejudice these proceedings.”
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Representatives for Andrew Tate have been contacted by Sky News for comment.
Lawyer Matt Jury, of McCue Jury & Partners, representing several alleged British victims of Andrew Tate, said: “We welcome the clarity from the Crown Prosecution Service that our authorities are working to ensure the Tates face justice here in the UK – they cannot be allowed to escape extradition.
“At the same time, we ask once more that CPS admit its mistake in failing to prosecute Tate when he lived in the UK and finally charge him for the rape and assault of the other three women, our clients, who originally filed criminal complaints against him as long ago as 2014 but were failed by the system.
“They deserve justice, too.”
The allegations were subject to a police investigation, which was closed in 2019.
Merseyside Police has been given more time to question a 53-year-old man arrested over the Liverpool parade collision.
The suspect is being held on suspicion of attempted murder, dangerous driving and drug driving after a car was driven into a crowd at Liverpool FC’s victory parade on Monday.
Police have said the extra time they have been given to question the suspect runs into Thursday.
The force believes the vehicle which struck pedestrians on Water Street had followed an ambulance crew that was attending to someone suffering a heart attack, after a road block was temporarily lifted.
Earlier, new footage emerged showing a car being driven into the crowd as panicked fans watched in horror and tried to avoid being hit.
The CCTV footage showed supporters attempting to move out of the way as the vehicle ploughed into supporters.
Cries could be heard from the crowd – before police and members of the public chased after the car.
In an update on Wednesday, Merseyside Police said it was in contact with 79 people who were injured in the crash – an increase on the 65 people who were confirmed injured in the force’s previous update.
Seven people remain in hospital in a stable condition following the collision, the force added.
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Moment car drives into crowds in Liverpool
Detective Superintendent Rachel Wilson said: “I’m pleased to say that the number of people in hospital is reducing as they continue to recover from the awful incident.
“We continue to support those still receiving treatment and as part of our ongoing enquiries we are identifying more people who were injured.
“I want to reassure the public of Merseyside that detectives are making significant progress as we seek to establish the full circumstances that led to what happened.”
Water Street where the collision happened has reopened. Pic: Reuters
Pic: Reuters
DS Wilson said that “extensive CCTV enquiries” were being carried out across Liverpool to “establish the movements of the car, a Ford Galaxy, before the incident took place”.
She added: “We have already had an incredible response from many of those who were there on the day, and I thank them for their co-operation with our investigation.
“I would encourage anyone who has not yet contacted police who may have information on this incident to do so.
“An extensive investigation into the precise circumstances of the incident is ongoing, and we continue to ask people not to speculate on the circumstances surrounding the incident and refrain from sharing distressing content online.”
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Emergency service on Water Street after the collision. Pic: Reuters
It comes after Water Street was reopened to vehicles and pedestrians on Wednesday after the police cordon was lifted.
Street cleaning teams worked overnight to clear the road, which had been littered with bottles, cans and football scarves and flags.
One remaining Liverpool flag was removed from the top of a set of traffic lights by a worker wearing hi-vis.
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On Tuesday night, Liverpool manager Arne Slot decided not to attend the League Managers Association’s annual awards ceremony “in solidarity with those affected by the incident on Monday”.
Meanwhile, speaking at an awards ceremony on Tuesday, former Liverpool boss Jurgen Klopp said the collision on Water Street “showed the two faces of life”.
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Klopp sends ‘thoughts and prayers’ to victims
He said: “The most beautiful face for a long, long time: the parade was incredible, the mood was incredible and from one second to another everything changed and we learned again there are more serious things in the world than football.
“Thoughts and prayers go to the injured people and their families as well.
“It should have been one of the greatest days in the history of the city, after a long, long time, because we didn’t have the opportunity to do it last time. I don’t know how and why it happened but we know what happened and that’s very bad.”
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