Tax change could make Cotswolds farms 'unviable'

Cotswold District Council has written to the UK government urging it to revise its tax plans

Farmers in the Cotswolds could be disproportionately affected by changes to the inheritance tax due to come in next year, it is feared.

Cotswold District Council has written to the government to urge it to revise its plans, as it said the area was more than 80% farmland.

It wanted the government to offer relief to places with high land values and take a more targeted approach.

The Treasury said most farms would be "unaffected" and the "money raised will go towards public services".

Planned changes would see inherited agricultural assets worth more than £1m taxed at 20% - half the usual rate - from April 2026.

Currently no inheritance tax is paid when farms are passed on.

Farmer Ian Boyd, who took on his farm in Whittington, Gloucestershire, when he was 18, remained concerned.

Now 70, he did not believe the UK government understood the financial realities of farming.

He said: "Farming's a long-term business and it can't just stop and start with political obstacles that (are) put in our way.

Farmer Ian Boyd does not think the UK government understands the finances of farming

"I think you're going to see a lot of family farms become unviable, being broken up.

"Presumably the farms will be bought by outside money coming in, because it's still a good tax break (for) the wealthier people and also people with large pension funds."

Mr Boyd's son-in-law, Fred Ackrill, 37, said: "Statistical organisations, have suggested that these figures that have been put in place by the current government are too low, do punitively impact small family farms.

"Yes, we want the government to be able to raise revenue, we want them to be able to bring in taxes, but I'd say we need to have more consideration for those small farmers."

Fred Ackrill believed there needed to be more consideration for small farmers

Cotswold District Council's cross-party group has asked the Treasury to consider compromises, including:

• Only making the tax payable when farms are sold rather than when farmers die

• Increasing tax to 40% for landowners who are not farmers

• Raising the tax threshold in places where land values are high, like the Cotswolds

Councillor Angus Jenkinson said: "There's opportunity to increase the tax in some areas, but we are very concerned that the way that the process has been implemented will lead to unintended consequences of various kinds.

"And our recommendations are really to try and advise the Treasury, 'Here are some unintended consequences that we think you should be concerned about'."

The Treasury said: "Most estates claiming agricultural and business property reliefs will be unaffected by the changes.

Angus Jenkinson wants the government to consider "unintended consequences" of the tax plans

"The latest data shows that 40% of agricultural property relief – worth £219m – was directed to just 117 estates."

It said cash raised would be spent on public services, adding: "We're also investing billions of pounds in sustainable food production and nature's recovery, negotiating a veterinary agreement with the EU to slash costs for food producers to export to the EU, and have appointed former NFU president Baroness Minette Batters to advise on reforms to boost farmers profits."

The government said the changes would affect only the richest 500 farms each year.

The NFU and the Country Land and Business Association believed up to 70,000 farms could be affected.