CLA Warns of Inheritance Tax Impact on UK Farms

The Country Land and Business Association (CLA) has raised alarms over proposed inheritance tax (IHT) changes in the UK, suggesting they could devastate small family farms. New modelling indicates that typical farms, such as a 200-acre arable farm with an annual profit of £27,300, would face an IHT liability of £435,000, necessitating the allocation of 159% of profits annually to cover the tax. Even a 250-acre farm owned by a couple with profits of £34,130 would incur a £267,000 tax liability, amounting to 78% of their profits each year over a decade. Starting April 2026, Agricultural Property Relief (APR) and Business Property Relief (BPR) will be capped at £1 million, forcing many farms to sell land to meet tax obligations. The CLA warns that these financial pressures may lead to cycles of asset sales or debt, jeopardizing the sustainability of family farms and food security. The organization is urging the government to reconsider these changes to protect the future of rural farming.