The argument that allowing farmers to pass on their properties without paying inheritance tax is no longer affordable for the state – despite significant tax increases and increased spending announced. elsewhere in the budget last week – risks upsetting those who will feel its impact.

Under current rules, farmers can pass on their assets after death without paying inheritance tax. But from April 2026 this will change.

Instead, only agricultural assets worth up to £1 million can be transferred tax-free, with those above this threshold facing an effective tax of 20 per cent. tax burden.

This measure was taken to close a “loophole” that allows people who are not traditional farmers to buy agricultural land to avoid paying inheritance tax. However, this has led to warnings that small farms which have little income, but whose farmland value is higher than this amount, will be forced to sell it to pay the new tax bills.

Ms. Reeves defended the policy arguing that “only a very small number of agricultural properties will be affected”.

She noted that each member of a married couple receives £1 million of agricultural property relief. They can also benefit from regular inheritance tax help of up to £1 million. She argued that this means many farming families will indeed be able to pass on inheritances worth up to £3 million without paying inheritance tax.

However, anger continues to mount from the agricultural community and its representatives.

Jeremy Clarksonformer Top Gear presenter and farm owner, wrote in the Sunday Times: “I rarely write in anger. But today I have to make an exception because Rachel Reeves announced in her budget that agricultural land would no longer be exempt from inheritance tax. And this could be the straw that breaks the camel’s back for farmers who are already struggling to get by.”

Conservatives and Liberal Democrats criticized the policy change.