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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).

Children on toy tractors during the farmers protest.
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Farmers’ children rode mini tractors at the protest. Pic Reuters

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.

Read more:
Farmers’ tax protest shows sector feels it’s being pushed aside

What’s the beef with farmers’ inheritance tax?

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.”

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‘Jeremy Clarkson is listening to wrong data’

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.

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Farmer explains how tax will hit him

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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Ethereum gaming network Xai sues Musk’s xAI for trademark infringement

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Ethereum gaming network Xai sues Musk’s xAI for trademark infringement

Ethereum gaming network Xai sues Musk’s xAI for trademark infringement

Ethereum gaming network Xai claims Elon Musk’s AI firm xAI has caused market confusion and reputational harm.

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Fast-track asylum appeals process to be introduced – as average time for decisions is more than one year

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Fast-track asylum appeals process to be introduced - as average time for decisions is more than one year

A new fast-track asylum appeals process will be introduced to speed up the process of deporting people without a right to remain in the UK, the home secretary has said.

As it currently takes, on average, more than a year to reach a decision on asylum appeals, the government plans to set up a new independent panel focused on asylum appeals to help reduce the backlog.

Home Secretary Yvette Cooper said “completely unacceptable” delays in the appeals process left failed asylum seekers in the system for years.

There are about 51,000 asylum appeals waiting to be heard.

The new independent body will use professionally-trained adjudicators, rather than relying on judges.

Ministers are introducing a new 24-week deadline for the first-tier tribunal to determine asylum appeals by those receiving accommodation support and appeals by foreign offenders.

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Police clash with protesters in Bristol

But they believe the current tribunal system, which covers a wide range of different cases, is still failing to ensure failed asylum seekers can be returned as swiftly as possible, nor can it accommodate a fast-track system for safe countries.

More on Asylum

It comes amid protests about the use of hotel accommodation for migrants.

The home secretary said the overhaul would result in a system which is “swift, fair and independent, with high standards in place”.

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She said: “We inherited an asylum system in complete chaos with a soaring backlog of asylum cases and a broken appeals system with thousands of people in the system for years on end.

“That is why we are taking practical steps to fix the foundations and restore control and order to the system.

“We are determined to substantially reduce the number of people in the asylum system as part of our plan to end asylum hotels.

“Already since the election, we have reduced the backlog of people waiting for initial decisions by 24% and increased failed asylum returns by 30%.

“But we cannot carry on with these completely unacceptable delays in appeals as a result of the system we have inherited which mean that failed asylum seekers stay in the system for years on end at huge cost to the taxpayer.”

Official figures released earlier this month showed a total of 111,084 people applied for asylum in the UK in the year to June 2025, the highest number for any 12-month period since current records began in 2001.

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Reform UK’s new immigration plans would have been seen as extreme just a few years ago

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Reform UK's new immigration plans would've been extreme just a few years ago

Mass deportations. Prison camps. Quitting the Refugee Convention and the UN Convention on Torture.

A shrug of the shoulders at the idea of the UK sending asylum seekers back to places like Afghanistan or Eritrea, where they could be tortured or executed.

“I’m really sorry, but we can’t be responsible for everything that happens in the whole of the world,” says Nigel Farage.

“Who is our priority?”

The Reform UK leader has been setting out his party’s new plans to address illegal migration in an interview with The Times newspaper – a set of policies, and a use of language, which would surely have been seen as extreme just a few years ago.

Only last autumn the Reform leader repeatedly shied away from the concept of “mass deportations”, describing the idea as “a political impossibility”.

But now he’s embraced Trump-style immigration rhetoric.

More on Asylum

It’s not surprising that Reform want to capitalise on the outpouring of public anger over the use of hotels to house asylum seekers. The policy was started by the previous Conservative government, in response to housing shortages – and Labour has failed to make significant progress on its promise to stop it.

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Asylum hotel protests set to rise

But all the major parties have shifted firmly to the right on this issue.

There’s been very little political criticism of the aggressiveness of Farage’s policy suggestions, and the premise that the UK should no longer offer sanctuary to anyone who arrives here illegally.

The Tory response has been to complain that he’s just copying the ideas they didn’t quite get round to implementing before calling the general election.

“Four months late, this big reveal is just recycling many ideas the Conservatives have already announced,” said Chris Philp MP, the shadow home secretary.

“Labour’s border crisis does urgently need to be fixed with tough and radical measures, but only the Conservatives have done – and will continue to do – the detailed work to deliver a credible plan that will actually work in practice.”

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Certainly, the ambition to arrest and deport everyone who arrives in a small boat – regardless of whether or not they have legitimate grounds for asylum – has clear echoes of the Tories’ Rwanda policy.

Despite spending £700m on the controversial idea, only four volunteers were ever sent to Kigali before it was cancelled by Sir Keir Starmer, who branded it a gimmick.

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Reform putting ‘wheels in motion’ for migrant hotel legal challenges

Labour have suggested they’ve diverted Home Office resources that were freed up by that decision into processing asylum claims more quickly and increasing deportations.

They’re hoping tougher action against the criminal gangs and the new “one in one out” deal with France will help deter the number of people crossing the Channel in small boats in the first place, currently at record levels.

But rather than offering any defence of the principle of offering asylum to genuine refugees – Labour’s Angela Eagle MP, the border security minister, has also focused on the feasibility of Farage’s policies.

“Nigel Farage is simply plucking numbers out of the air, another pie in the sky policy from a party that will say anything for a headline,” she said.

“We are getting a grip of the broken asylum system. Making sure those with no right to be here are removed or deported.”

Even the Liberal Democrats have taken a similar approach.

“This plan sums up Nigel Farage perfectly, as like him it doesn’t offer any real solutions,” they said.

“Whilst Farage continues to stoke division, we Liberal Democrats are more interested in delivering for our local communities.”

It’s been left to the Refugee Council to defend the principle of asylum.

“After the horrors of the Second World War, Britain and its allies committed to protecting those fleeing persecution,” said CEO Enver Solomon.

“The Refugee Convention was our collective vow of ‘never again’ – a legal framework ensuring that people who come to our country seeking safety get a fair chance to apply for asylum.

“That commitment remains vital today. Whether escaping conflict in Sudan or repression under regimes like the Taliban, people still need protection.

“Most find refuge in neighbouring countries. But some will seek sanctuary in Europe, including Britain.

“We can meet this challenge by upholding a fair, managed system that determines who qualifies for protection and who does not.”

But with Reform leading in the polls, and protests outside hotels across the country – politicians of all stripes are under pressure to respond to public frustration over the issue.

A recent YouGov poll found half of voters now believe immigration over the last ten years has been mostly bad for the country – double the figure just three years ago.

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While the government has made some progress in reducing the cost of asylum hotels – down from £8.3m a day in 2023/4 to £5.77m a day in 2024/5 – the overall numbers accommodated in this way have gone up by 8% since Labour took charge, thanks to the surge in new claims.

Sir Keir has previously said he won’t make a promise he can’t keep.

But current efforts to end the use of asylum hotels by 2029 are clearly not working.

That’s a credibility gap Farage is more than ready to exploit.

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