Law firms' and accountants' phones have been red-hot this week as frantic farmers try to work out the best way to secure their farms.
Chancellor Rachel Reeves' Budget announcements have created a sense of fear and panic among farmers that they will no longer to pass down viable farm businesses to the next generation.
Changes to Agricultural Property Relief will mean only the first £1m is secure - with 20% tax above that. Farmers complain that most viable farm businesses will be caught in the tax net - despite assurances from Ms Reeves that 73% would be unaffected.
Much of the fine detail around the new inheritance tax regime for farmers is still unclear - and as the changes are planned for the 2025/26 tax year, professionals fear that they will be working in the dark for some time to come.
Most measures contained in this year's Budget will go before Parliament soon as the 2025/26 Finance Bill. But Agricultural Property Relief (APR) is scheduled for the following year - meaning that vital detail could remain elusive for some time to come.
"The phone hasn't stopped ringing," said Bruce Masson, a partner at accountancy firm Larking Gowen. The general advice has been to hold fast until more information comes to light rather than acting in haste.
There was a sense of unfairness among farmers, he said. "A lot of farmers are genuinely struggling. It's a very volatile market at the moment."
Those facing a potentially huge inheritance tax bill would have to sell land or assets, diminishing the viability of businesses, he said.
He was having "a lot of very heartfelt conversations with clients and particularly those of a certain age who are in their 80s". "They are naturally very upset that they won't be able to hand over a viable business to their children and grandchildren," he said.
Since the 1990s, through Labour and Conservative governments, farms have operated under "one of the most benign periods for relief", he said, allowing for smooth successions. This has now been put in jeopardy.
Jeanette Dennis, partner at Ashtons Legal, said there was "a lot of confusion out there at the moment".
Many small farmers had been in touch asking what to do, she said. Some called or emailed even while the chancellor was on her feet - and some made contact that night.
Some wouldn't have the ability to find money to pay tax bills - meaning small farms having to sell land, rent out or cease farming.
"There is no single 'go to' definitive guide as to what all the changes are and a lot of extra stuff is coming out gradually," she said.
"I know it is early days but farmers are worried, and have to try to drill crops at this time of year when they don’t know what the outcomes will be in terms of budgeting."
Although there were a number of issues besides inheritance tax their key concern was how to pass on the farm to the next generation without looking at a sale of all or part of the business to pay the 20% tax, she said.
Issues included land values - which could be inflated by development potential even when the family has no intention to come out of farming.
"It is unfair as a lot of farmers don’t want to develop their land," she said.
"This was never an issue in the past as there was 100% Business Property Relief (BPR). One consequence may be farmers have to sell or give away land now while they can, and before there are further tax changes."
Many farmers plough profits back into the business to help cashflow and to reinvest - meaning they carry capital balances of around £300k to £400k.
"As that money is what they are in theory entitled to on death they will now be penalised for being prudent business people," she pointed out.
"The new rules will mean that older farmers will need to either give away or spend the money which they were keeping in the business which was being used to run the business, and that in turn could lead to liquidity issues for farm businesses."
A farmer rang her to say he was about to invest £900k in a grain store to bring the farm up to the required standards but his son is now asking whether it was worth it as he could be improving his asset base only to be penalised on death, she said.
Some farmers were worried about passing assets to the younger generation in case they have a bad marriage or a drugs issue, she said. Others were pleased with actions they took pre-Budget.
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