Family farm fears over inheritance tax plans

A row has erupted over claims from the Conservatives that the Labour Party plans an inheritance tax raid on family farms, threatening their survival. 

Greg Smith, standing for re-election as the Conservative candidate for Mid Buckinghamshire, has echoed claims from the Environment Secretary, Steve Barclay, that Labour plans to “secretly unleash a bombshell £1billion inheritance tax raid on farmers”, according to a report in The Express. 

Mr Smith told the newspaper: 

“If we do get a Labour government and they do remove the inheritance tax relief, virtually every family-run farm in this country will die. 

“Because there is no way those smaller farms could survive if they were forced to sell off chunks of land to meet an inheritance tax bill. 

“And that is where Labour are totally blind to the realities of rural communities and frankly dangerous.” 

Labour has denied the claims, branding them “desperate nonsense”, but according to The Express the party has declined to rule it out. Oppositions that expect to form governments are typically reticent to constrain their future Chancellors’ options by pledging not to make particular changes to taxation beyond what they have set out in a costed manifesto, so this should come as no surprise. 

No changes to the inheritance (or indeed any other) tax regime specifically affecting farming are mentioned in Labour’s 2024 manifesto. All the document has to say about inheritance tax is: 

“We will end the use of offshore trusts to avoid inheritance tax so that everyone who makes their home here in the UK pays their taxes here.” 

This would not affect farmers any more than it would people from any other professional background, and it has no bearing on reliefs. On farming more broadly, the party makes supportive noises on food security and establishing a target for the public procurement of local or environmentally certified foods. The Conservatives, meanwhile, have pledged to increase the farming budget by £1 billion. 

Should Labour win the election the expected new Chancellor of the Exchequer, Rachel Reeves, will present her first Budget after receiving an economic forecast from the Office for Budget Responsibility in September.