Why We Oppose the Recent Inheritance Tax Changes and What It Means for Family Farms

At Castle Farm, we pride ourselves on being more than just a business. We are a family-run farm that has been part of this local community for four generations. We relish the engagement that we have with visitors to our farm shop and fields. We are committed to producing high-quality, sustainable food while contributing to local food security, enhancing the environment in which we operate, and supporting local businesses through the farm shop.

The proposed changes to Inheritance Tax are going to have catastrophic, long-term and irreversible effects on family farms like ours. That’s why we feel it’s important to share our concerns about how they could impact not just us but also you, our customers.

What Are the Changes to Inheritance Tax?

Previously, farm business assets were granted relief from inheritance tax to enable generational continuity. Now 20% of the total farm value (in excess of £1 million) will be owed to the government on the death of the owner. This means that the next generation could face huge tax bills. (Note that non-farming assets owned by farmers have always been and remain taxed like anyone else’s).  

How Will This Impact Family Farms?

For family-run farms like Castle Farm, these changes could be devastating. These tax implications could mean that any future farm profits (which are usually invested to enhance productivity, maintain buildings or undertaking conservation projects) would all go to pay the government, for many years after the owner dies. As farms operate on very tight profit margins, many farming families would seriously struggle or be unable to pay the tax.

Many farming families will therefore be forced to sell significant parts of their farm just to pay this tax. In some cases, the remaining land area could then be too small to manage profitably, resulting in the entire farm being sold. The tax system, until now, encouraged farm owners to hold onto farm assets until death, meaning many family farms are now owned by a small number of ageing people who are particularly vulnerable to this change.

How Will This Impact Everyone?

1. Countryside Development: When a farm or farmland is sold off, it is vulnerable to non-agricultural occupation or development which would erode the character of your countryside and your local area. Once made, these changes would be irreversible.
2. Threat to Local Food Supply: Family farms play a vital role in local food production. Loss of farmland and expertise will lead to a greater reliance on imported food and rising food costs.
3. Environmental Damage: Family farms are guardians of the landscape. They understand the importance of always striving to improve the environment in which they operate. The threat of having to sell land to pay tax would prevent farms investing time or money in beneficial long-term environmental projects.
4. Detrimental to the Economy: Land put up for sale may be used by non-farming investors to avoid higher rates of inheritance tax. Further, the reduced investment into and sustainability of farm businesses, is projected to harm the UK economy and will lead to less money being available to fund government services. In summary, the tax will be detrimental to the UK economy. 
5. Attrition of Community: Family farms contribute to local economies and rural communities. The loss of family farms will lead to the growth of agribusinesses which may not have strong connections to the locality or loyalty to the local communities.
6. Loss of Generational Knowledge: Farming isn’t just a job, it’s a way of life passed down through generations. When farms are sold, years of expertise and local knowledge are often lost – and so is the motivation for the dedication and hard work that the farming life requires.

What are we asking for?

A Review of the Impact. The figures initially projected by the government seriously underestimate the number of farms that will be affected by these tax changes; The National Farmers Union analysis shows that 75% of farms would fall above the threshold for the tax, not 27% as the government claims.

Urgent Consultation.No industry consultation was conducted before these tax changes were made. The farming industry understands the need to pay taxes to fund public services but is unfairly penalised by the artificially high value of land and the huge cost of modern farm machinery. Farmers are asking for the Treasury to hold a consultation to reach a mutually beneficial solution whereby genuine farmers can be granted the necessary tax relief but non-farming investors in land do not receive these concessions.  

An urgent resolution is required to prevent irreversible changes to the countryside.  

Together, We Can Make a Difference

We have joined the ‘Stop the Family Farm Tax’ campaign to advocate for fairer inheritance tax rules that protect family farms.

We are deeply grateful for your ongoing interest and support for Castle Farm and hope you will stand with us to protect the future of British family farms. Together, we can ensure that farms like ours continue to provide fresh, locally sourced food, support biodiversity, and help preserve the environment for generations to come.

Thank you for taking the time to understand this important issue. Let’s keep the conversation going and work toward a solution that benefits everyone. If you have any questions, please feel free to get in touch with one of the family hello@castlefarmkent.co.uk.