Government changes to inheritance tax on farms will likely leave elderly farmers exposed, with no time to manage their way through the new policy.
This is according to the Office for Budget Responsibility (OBR), which has published a supplementary forecast on the cost of changes to agricultural property relief.
Despite promises before the election not to do so, the government scrapped inheritance tax reliefs for farms, designed to enable family farms to be passed on to the next generation.
From April 2026, agricultural property relief (APR) and business property relief (BPR) will be capped at £1m in total, per owner.
In its initial report, released last week, the OBR said that it was 'highly uncertain' whether the measures would raise the £500m the Treasury claims it would raise.
In a new supplementary forecast, the OBR now says that it is "likely to be more difficult for some older individuals to quickly restructure their affairs in response to the measure."
NFU President Tom Bradshaw said the report confirmed what the union had 'repeatedly warned' since the budget was unveiled – that it would be older farmers who would be hardest hit by the IHT change.
He said it was an 'appalling position' to put elderly people in: “I outlined the terrible human impact on elderly farmers explicitly when I met the prime minister," he added.
“One minute they were advised to keep their farms until death to pass them on to the next generation, the next they’re left knowing that if they live beyond April 2026 when the measures come in, their children may have to break up or sell the farm."
Mr Bradshaw asked: “At every stage the government has consistently ignored what we have been telling them about this abhorrent policy. Is it now going to ignore the OBR too?
“And, given the OBR says it’s highly uncertain it will raise the expected amount of money either, surely it is time for ministers to accept this policy needs the proper consultation it never had?”
On Saturday 25 January, towns and cities across the UK will be hosting protests as part of the industry's next steps in raising attention to the issue.
All four UK farming unions – NFU Scotland, NFU, NFU Cymru and Ulster Farmers’ Union - are organising the action and will participate directly in it.
