Almost nine in 10 rural family businesses have shelved investment amid fears over inheritance tax changes, fuelling warnings that land sales and deteriorating assets could undermine Britain’s food-producing economy.
Britain’s family farms are putting investment on hold as uncertainty over inheritance tax threatens to undermine rural businesses, according to research that has intensified pressure on the government ahead of the Budget.
A survey by the Country Land and Business Association (CLA) found that 89 per cent of rural family businesses had scrapped or postponed investment because of concerns about the revised tax threshold. Shelved projects were worth between £50,000 and more than £150,000, GB News reported.
Nearly half of respondents said they might have to sell at least a quarter of their land to cover a potential tax bill, while one in four feared selling more than half.
“I am doing everything I can to devalue my business to reduce the tax burden for my children,” one respondent told the association.
The reported consequences extend beyond delayed machinery purchases. Some farmers are reconsidering crop production while buildings and land deteriorate, raising questions about the long-term cost of uncertainty for domestic food production.
Hannah Darby, who farms with her uncle, said his estate could face an inheritance tax liability of about £450,000 when he dies. Selling farmland to meet the bill, she warned, could leave their business unviable.
Darby also called for greater parity between single farmers and married couples, arguing that people who have devoted their lives to farming should not be disadvantaged by their personal circumstances.
“We need governments on our side,” she told GB News. “Farmers are incredibly resilient, resourceful people, but we’re getting near to being very broken.”
Seven in 10 countryside family businesses said they feared they would not survive the next decade, according to the CLA survey. The association separately claimed that 85 per cent of land-based businesses would be affected by the £2.5mn threshold.
The government has previously said the updated £2.5mn relief allowance means most family businesses will not be affected. The CLA is demanding a full reversal, arguing that raising the threshold alone would not restore confidence.
With the Budget approaching, ministers face mounting calls to resolve the uncertainty. The prime minister has acknowledged that the government has a “long way to go to build back trust” with farmers.
For rural businesses, the stakes are immediate: whether to invest in future production or preserve assets against a potentially costly transfer to the next generation.
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