Farmers’ inheritance tax could affect five times more farms than Treasury said, analysis finds

Published

7 months ago

November 27, 2024

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The new inheritance tax policy could affect up to five times more farms than the Treasury initially said, according to new analysis.

The government said its plan to impose 20% inheritance tax on farms worth more than £1m will affect 500 farms in the 2026-2027 financial year, based on analysis of past claims.

However, the Central Association of Agricultural Valuers (CAAV) has looked at the numbers and found 2,500 farms could be affected each year.

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The group, which represents businesses across UK agriculture, found up to 75,000 individual farms over a generation – which they define as 30 years – could be affected by the tax.

Jeremy Moody, author of the report and secretary and adviser at CAAV, told Sky News the government figures had not taken into account farmers who only claim Business Property Relief (BPR).

Farmers protested last week, saying the tax would mean the end of many family farms because they would have to sell off land to pay it.

Environment Secretary Steve Reed had previously promised he would not change inheritance tax for farmers.

Many have said the government’s figures were incorrect and more than 500 family farms would be affected a year.

The National Farmers’ Union (NFU) said the real number is two thirds of farms of the UK’s 209,000 farms, while the Country Land and Business Association (CLA) said 70,000 farms would be affected.

But Mr Reed has insisted the figure is based on “raw data” and said the Treasury had taken into account all possible figures.

The Treasury said its figures came from data on farms that had claimed Agricultural Property Relief (APR), as well as those who claimed both APR and BPR – but not solely BPR.

Currently, to get 100% inheritance tax relief farmers have to claim APR for farmhouses, land and buildings, and BPR for machinery and livestock – but this can also be claimed for land and buildings.

What can farmers claim under APR and BPR?

Agricultural Property Relief (APR) and Business Property Relief (BPR) are mechanisms farmers currently use to claim 100% inheritance tax relief.

Different aspects of farms come under the two schemes, with some aspects able to be claimed under either.

APR:

Farmhouses used by farmers

Buildings used for agricultural purposes such as grain storage or to house livestock

Land used for farming and growing as well as woodland to help farming, such as woodland shelter belts

BPR:

Machinery, such as tractors

Livestock

Farmshops

Holiday and industrial lets on farms

Buildings used for agricultural purposes

Land used for farming

Not all farms have to claim BPR

Mr Moody explained some farms have to have farmhouses to be close to their livestock, so must claim APR for the farmhouse and BPR for machinery.

But, not all have to claim APR as not every farm includes a farmhouse. That’s because some farmers, mostly those who grow crops, do not live on the property – so they can just claim BPR.

“The Treasury didn’t look at BPR claims sitting there on their own,” he told Sky News.

“Unless you’re trying to argue the value of a farmhouse, which these days can be quite high, it’s just convenient to claim BPR on the land and machinery.

“A landowner might place the farm under BPR purely for simplicity because whether you claimed under APR or BPR has never mattered before.

“If a family farm is structured as a company then they also would only claim BPR, which isn’t wrong to do.”

How long is a generation?

Mr Moody added government figures fail to consider that farms are typically handed down every 30 years, for example from an 85-year-old who dies to their 55-year-old son or daughter.

“The government’s figures accept that the effect from introducing inheritance tax is over 75 years, they didn’t think about how long a generation is,” Mr Moody said.

Because of spousal inheritance tax relief, the government has said a couple would be able to pass on a farm worth up to £3m before paying any inheritance tax. They said as it is payable over 10 years it will not be a big hit – something farmers disagree with.

A government spokesman told Sky News: “Our commitment to our farmers is steadfast – we have committed £5bn to the farming budget over two years, including more money than ever for sustainable food production, and we are developing a 25-year farming roadmap, focusing on how to make the sector more profitable in the decades to come.

“We have been clear since this change was announced that around 500 claims of Agricultural and Business Property Relief each year will be impacted – this is based off actual claims data – and even when inheritance tax does kick in, it is effectively at half the rate paid by others.

“It is not possible to accurately infer inheritance tax liability from farm net worth figures as there are different circumstances affecting each farm, such as who owns it, the nature of ownership, how many people own it and how affairs are planned.”

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2 hours ago

July 1, 2025

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Chief rabbi condemns BBC’s ‘mishandled response’ to anti-IDF chanting at Glastonbury – as Bob Vylan issue new statement

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3 hours ago

July 1, 2025

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Chief rabbi condemns BBC's 'mishandled response' to anti-IDF chanting at Glastonbury - as Bob Vylan issue new statement

The chief rabbi has described the BBC’s response to anti-IDF chanting at Glastonbury as “belated and mishandled” – as the punk-rap duo involved, Bob Vylan, said the UK government needed to talk about its “criminal inaction”.

Sir Ephraim Mirvis said “vile Jew-hatred” had been aired at the Somerset music festival and it was a “time of national shame”.

Confidence in the BBC’s “ability to treat antisemitism seriously” has been brought to a “new low”, he said in a post on X, adding that “outright incitement to violence and hatred” appeared to be acceptable if it was couched as “edgy political commentary”.

Ordinary people had not only failed to see incitement “for what it is” but had cheered it, chanted it, and celebrated it, he said. “Toxic Jew-hatred is a threat to our entire society,” he added.

Bob Vylan, posting a new statement on Instagram on Tuesday, said they were “not for the death of Jews, Arabs or any other race or group of people”.

Rather, they were for the “dismantling of a violent military machine” – the Israel Defence Forces.

Bob Vylan chanted “death to the IDF” at Glastonbury. As many as 95% of the IDF are thought to be Jewish.

In their statement, the group said they were a “distraction from the story” and that whatever “sanctions” they received would also be a distraction.

Their US visas have been revoked and United Talent Agency, their US representatives, have dropped them.

Referring to the war in Gaza, they claimed the UK government does not want them to ask “why they remain silent in the face of this atrocity”, “why they aren’t doing more to stop the killing” and “feed the starving”.

They added: “The more time they talk about Bob Vylan, the less time they spend answering for their criminal inaction.

“We are being targeted for speaking up. We are not the first, we will not be the last, and if you care for the sanctity of human life and freedom of speech, we urge you to speak up, too.”

It has emerged that Tim Davie, the BBC’s director-general, was at Glastonbury when the duo led chants of “Death to the IDF” which were broadcast live.

The prime minister’s spokesman, asked if the PM had confidence in Mr Davie, said Sir Keir Starmer had “confidence in the BBC”, adding: “The position of the director-general is a matter for the BBC’s board.”

Speaking in the Commons, Culture Secretary Lisa Nandy said “accountability” was important and it was something she had “impressed upon the BBC leadership”.

She added: “When you have one editorial failure, it’s something that must be gripped. When you have several, it becomes a problem of leadership.”

The cabinet minister said she’d called Mr Davie after Bob Vylan’s set had been broadcast to find out why it had aired, and why the feed had not been cut.

“I expect answers to these questions without delay,” she said.

Meanwhile Dame Caroline Dinenage, chair of the culture, media and sport committee, has written to Mr Davie in relation to the corporation’s Glastonbury coverage.

The committee has said the letter asks about editorial and decision-making processes and whether consideration was given to broadcasting with a delay. It also asks about staffing levels at the festival and contingency planning.

Avon and Somerset Police has begun a criminal investigation and is reviewing footage of both Bob Vylan and Kneecap’s performances at Glastonbury.

The force said a senior detective had been appointed – and it had been contacted by people from around the world.

“We… recognise the strength of public feeling,” it said.

During Kneecap’s set, one member suggested starting a “riot” outside his bandmate’s forthcoming court appearance, before clarifying that he meant “support”. Liam Og O hAnnaidh, also known as Mo Chara, is charged with a terror offence.

Bob Vylan had been due to tour the US before their visas were revoked.

US deputy secretary of state Christopher Landau said action had been taken “in light of their hateful tirade at Glastonbury, including leading the crowd in death chants”.

“Foreigners who glorify violence and hatred are not welcome visitors to our country,” he added.

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During Bob Vylan’s set, the duo performed in front of a screen that showed several messages, including one that claimed Israel’s actions in Gaza amounted to “genocide”.

The war in Gaza began after Hamas militants attacked Israel on 7 October 2023 and killed 1,200 people and took about 250 hostage.

Israel’s offensive in Gaza has led to the deaths of more than 56,500 people, according to the Hamas-run health ministry, which does not differentiate between civilians and combatants.

Media watchdog Ofcom has said the BBC “clearly has questions to answer” over the live stream from Glastonbury.

A BBC spokesperson said: “The director-general was informed of the incident after the performance and at that point he was clear it should not feature in any other Glastonbury coverage.”

The broadcaster respects freedom of expression but “stands firmly against incitement to violence”, they said.

They added: “The antisemitic sentiments expressed by Bob Vylan were utterly unacceptable and have no place on our airwaves…

“The team were dealing with a live situation, but with hindsight we should have pulled the stream during the performance. We regret this did not happen.”