'Nail in the coffin' Family farms react to inheritance tax change

For more than 100 years, the family of Andrew Smith, 56, has been running a cattle farm on Bodmin Moor, Cornwall. Smith, who now runs the farm, sees Chancellor Rachel Reeves' changes to inheritance tax rules as a betrayal of farmers.

- Jem Bartholomew Jedidajah Otte

Working with his three sons, the farm produces about 2,000 sheep and 30-40 cows each year, yet makes "no profit," he says, "we just pay the bills."

Last Wednesday, Reeves announced that, from April 2026, farms and other business property which had been passed on to heirs tax-free will fall within inheritance tax. Inheritors will have to pay 20% of their value above £1m, half the headline rate of 40%.

"The boys have been in the business with me since they left school," Smith says. "They have been bred to look after stock on the moors, which is a very difficult terrain to earn a living on. They were expecting to take it over from me, but this is the final nail in the coffin for family farms."

"Once my sons are gone, you can't replace them, nobody else will have the experience on these hills, the food will just not get produced. It's the end of the line."

Smith believes the fact that UK family farming today is by default asset-rich, but cash-poor has been entirely ignored by the Chancellor's new rules. "If my farm is worth £5m, my sons won't be able to pay £800,000 in inheritance tax, of course. They'll just have to sell half their land when I die. Then the farm will be unviable. Starmer has 100% broken a promise. They lied."