What the whispers say about the inheritance tax on farms
As the budget looms more than six weeks away, speculation swirls around potential tweaks to the inheritance tax (IHT) reforms first unveiled last year. Reports from Whitehall have suggested the threshold for IHT could rise from £1 million to £5 million, with a staggering £10 million cap for married couples. If true, that shift would exclude many smaller farms from being liable to pay the tax in the first place.
In tandem with a higher threshold, the plan would remove the 50% relief on IHT for estates above the new limit. That means while more farms might be spared entirely, larger, asset-rich farms could bear a heavier overall burden, potentially boosting Treasury revenues.
Senior figures in farming circles have long argued that lifting the threshold would protect the smallest enterprises and soothe anxious rural voters. Yet insiders cautioned that a threshold rise does not resolve the fundamental challenge facing many farming families.
Potential reforms: what it could mean in practice
The proposed changes would, on the face of it, reduce the number of farms exposed to IHT, a policy supporters say would safeguard family legacies and keep farming viable for the next generation. Critics, however, warn that the removal of relief for estates above the new ceiling could simply push the tax onto the farms that remain within reach of the threshold, or encourage asset restructuring to dodge liability.
Two senior farming figures told me that while a higher threshold might be welcome, it wouldn’t solve what they describe as an “insolvable” problem for many families who fear losing land and livelihoods in the long term.
Personal impact on farming households
Richard Cornock runs a small dairy farm in south Gloucestershire, a family venture dating back to 1822. He hopes to pass the business to his son, Harry, who is just 14 and training to be a farm manager. The stress surrounding IHT has been mounting in households like his.
“I’ve been under so much stress like most farmers worrying about this tax,” Cornock said. “And I really hope they push the boundaries on the thresholds because the £1 million figure proposed at the moment is ridiculous.”
He described efforts to protect his family’s future that went beyond ordinary planning, including exploring life insurance, which he says is complicated by health issues. “I looked into life insurance to cover my kids… and I can’t get it because I had a heart condition,” he said, his voice breaking as he paused the interview. The moment underscored the real human cost of policy debates—an emotion that has been mounting across farming communities.
Official stance and political dynamics
Officials have declined to comment on the speculative reports, reiterating that the government has defended the IHT reforms, noting that most estates would not pay and those who do can spread payments over a decade. The debate is deeply entwined with rural voting dynamics, where support has shifted away from the governing party in some areas since the last election.
Labour faces pressure to respond decisively to rural concerns. The question on many minds is whether any iteration of the policy message can restore public confidence in a system that affects families who work the land and contribute to the country’s food supply.
What happens next and what it means for voters
With the budget still weeks away, the talk of a potential U-turn has already altered how farmers view long-term planning. If the threshold rises while relief is scaled back, the calculus for many families could change but may still leave a stubborn core of risk—especially for mid-sized holdings that are neither small enough to escape tax nor large enough to shield themselves with relief.
The sentiment among farmers is clear: while any adjustment is better than a flat denial, the damage to trust has already been done. For communities that rely on family farms as anchors of local economies and cultural heritage, the stakes are existential, not merely political.
As politicians weigh options, farmers remain vigilant, counting on clearer guidance and practical protections that acknowledge the realities of inheritance, business continuity, and the land they steward for future generations.
