Family farms face closure as Reeves' tax raid looms

FARMERS in the North East are set to bear the brunt of Rachel Reeves's looming inheritance tax raid, at an average estimated cost of more than £1.8million.

- By Lotti O’Brien

Analysis found it could take at least 17 years’ income for these rural businesses — an average of £112,300 a year — to settle the tax burden being imposed from April 2026. This is set to cripple thousands of family-run farms across the UK, putting many at risk of closure, according to data from law firm Weightmans.

Farms and agricultural land have been exempt from inheritance tax since 1984 due to reliefs applied to estates. But the Chancellor is to end those tax reliefs for estates worth more than £1million, or £3million if a farm is jointly owned by a couple.

Any tax owed beyond these levels will be charged at 20%.

Analysis from estate agents Strutt & Parker showed the average family farm could face IHT bills upwards of £313,242, taking more than three years of farm income to pay off.