Scrapping inheritance tax reliefs would 'tear apart' family farms and damage food security, the Country Land and Business Association (CLA) has warned.
The warning follows a poll by the CLA which found that a majority (86%) of farmers said it was ‘likely’ that their land would have to be sold upon their death if inheritance tax reliefs are gone.
And more than 90% said scrapping reliefs would damage the UK’s food security in the long run, with just 5% saying they did not believe the move would hit food security.
The CLA, which represents thousands of farmers and landowners, warned that the findings showed the move to scrap tax reliefs would 'tear apart' family farms during a 'crucial time' for the industry.
More than 500 farmers responded to the poll amid concerns the government is looking to change agricultural property relief (APR) and business property relief (BPR) in autumn budget.
APR exists to ensure the continuance of farming after the death of the farmer, while BPR fulfils the same objective for other types of family businesses.
The group's president, Victoria Vyvyan said many farmers could be forced to sell land to pay inheritance taxes, putting livelihoods at risk.
Uncertainty over tax was one of the most pressing challenges facing the rural sector, she explained.
"There is a chill wind blowing through the tax environment and CLA members are very nervous that careful plans to sustain multi-generational businesses are about to be thrown to the wolves.
“Removing or even capping inheritance tax reliefs would have a major impact on the viability of family farms, jeopardising the future of rural businesses up and down the country."
The CLA said reliefs allowed farmers and rural business owners to continue to produce food, maintain landscapes and support the rural economy.
Maintaining a stable capital tax system was important to provide business owners confidence to make long-term commitments, it said, particularly those needed when investing for growth or to deliver for the environment over the coming decades.
If there was no relief, or even if it was capped at £500,000 as some have suggested, there would be a high tax bill to pay, the body warned.
Statistics show 17% of UK farms failed to make a profit and 59% made a profit of less than £50,000 in 2022/23, with the CLA saying this left little scope to pay inheritance tax out of farm income.
Ms Vyvyan said: "Many farmers could be forced to sell land to pay inheritance taxes, putting livelihoods, and the nation’s food security, at risk, especially if the land is bought by corporates with deep pockets and no inheritance tax concerns.
“At a time of profound change in the industry, we need stability for our businesses while we adjust to new agricultural policies."
