True cost of Rachel Reeves’ farmer tax laid bare – and exact number of businesses impacted

Planned changes to could hit significantly more farmers than Government estimates suggest, according to the Central Association of Agricultural Valuers (CAAV).

While the Treasury predicts only 500 farms annually will be affected, CAAV estimates the number is closer to 2,500 – a huge fivefold increase.

Jeremy Moody, CAAV’s secretary and adviser, said the Treasury’s figures are based on an “incomplete picture,” pointing out they failed to account for diverse ownership structures and overlooked many who rely solely on business property relief (BPR) rather than agricultural property relief (APR).

He told : “What they got wrong is, they didn’t know what to ask and couldn’t answer them even if they had.”

The changes would see those inheriting farms taxed at 20% on estates worth over £1million, even after APR is applied. Married couples may benefit from a higher threshold of £3million, but Mr Moody warned that 75,000 farms could still be affected over a generation.

He highlighted that tenant farmers, landowners without farmhouses, and shareholders in family businesses are particularly at risk.

Illustrating how even mid-sized operations could face significant challenges, Mr Moody said: “A dairy farm with 200 dairy cows will start with £500,000 worth of dairy cattle before anything else.”

as farmers rallied against what they called a betrayal of British agriculture. Dozens of tractors joined a slow-moving demonstration bearing messages such as “No Farmers, No Food, No Future.”

Organisers accused the Government of endangering food security and putting family farms at risk.

A Government spokesman said: “Our commitment to our farmers is steadfast – we have committed £5billion to the farming budget over two years, including more money than ever for sustainable food production, and we are developing a 25-year farming roadmap, focusing on how to make the sector more profitable in the decades to come.

“We have been clear since this change was announced that around 500 claims of Agricultural and Business Property Relief each year will be impacted – this is based off actual claims data – and even when inheritance tax does kick in, it is effectively at half the rate paid by others.

“It is not possible to accurately infer inheritance tax liability from farm net worth figures as there are different circumstances affecting each farm, such as who owns it, the nature of ownership, how many people own it and how affairs are planned.”