Inheritance tax controversy

The farming inheritance tax changes have faced some of the biggest protests of all Labour's new measures. But is the backlash justified? We crunch the numbers

- Fergus Collins is a writer, editor and the host of BBC Countryfile Magazine's multi-award winning Plodcast.

Since 1992, farmers have benefitted from 100% Agricultural Property Relief (APR), which means they don't have to pay any Inheritance Tax (IHT) on their land or property when the farmer-owner dies. But in the autumn budget of 2024, the new Government proposed changing APR to 50% but with the first £1 million exempt. A married farming couple can claim £1 million each. Where tax must be paid, farmers have 10 years interest-free to make the payment.

The Government's hope is that the change will raise revenue and close a loophole whereby speculators can invest in agricultural land without paying IHT. The Government claims the impact will be minimal: “Almost three-quarters of estates claiming Agricultural Property Relief and the majority of estates claiming Business Property Relief in 2026 to 2027 are expected to be unaffected by these reforms.”