As the Finance Bill approaches its Third Reading in Parliament in early 2026, farmers and family business owners across the North are facing an unprecedented crisis that threatens to destroy generations of rural enterprise and community investment.
The proposed changes to Agricultural Property Relief (APR) and Business Property Relief (BPR), announced in the Autumn Budget, will impose inheritance tax on family farms and rural businesses valued over £1 million from April 2026.
While government ministers claim only the wealthiest will be affected, analysis by the Country Land and Business Association shows that a typical 200-acre arable farm making a profit of £27,300 would face an inheritance tax liability of £435,000 – requiring 159% of annual profits each year if spread over 10 years.
The Economic Case is Clear
The CLA’s analysis suggests that many farms could be forced to sell up to 20% of their land just to meet the tax bill. This would:
· Devastate investment in the rural economy, with uncertainty already stalling essential infrastructure projects
· Undermine food security by reducing productive farmland
· Destroy the long-term planning essential for environmental improvements and regenerative farming practices
· Break up family businesses that have sustained local communities for generations
Gavin Lane, CLA President, said: “Farmers and family business owners have planned for decades on a simple promise: build a viable business and you can pass it onto your children. This policy turns that promise into a tax trap. For many, the only way out is to sell land or break up the firm. It goes against a sense of fairness to have the rug pulled from beneath them.
“Labour MPs representing rural seats know that this policy is a disaster, and polling shows the public can see it too. Markus Campbell-Savours voted against these changes because Labour promised at the election it would not put inheritance tax on family businesses. He has refused to break that promise, and he has earned enormous respect.
“As the Bill progresses in the new year, we will work with all Labour MPs who are prepared to put their constituents, and economic stability, above party loyalty.”
CLA Director North Harriet Ranson warns: “Ministers say they’re targeting people who buy farmland as a tax shelter, but whether through ideology, inexperience or a fundamental misunderstanding of how family businesses work, it is treating multigenerational businesses as a problem to be solved rather than the bedrock of long-term investment and ignoring the well-known human cost entirely.”
The Human Cost is Devastating
Beyond the stark economics, the human impact on farming families has been severe.
Business owners report that every family conversation now centres on death and tax, with the grieving process beginning while parents are still alive. The psychological toll of knowing that decades of stewardship, skills and investment could be taxed out of existence is pushing families to breaking point.
Labour MPs Must Choose
CLA Director North Harriet Ranson said: “Many Labour MPs were elected on their promise that the countryside was safe in their hands. They fought hard for rural seats, building trust with farming communities and rural business owners. But before they could deliver on those promises, the government announced these changes with no consultation.
“Now MPs face a stark choice: will they stand with the government that has undermined their election pledges, or will they stand with their constituents – the family businesses that have kept local economies going for generations?”
Call to Action
The Country Land and Business Association is urging local residents, farmers, and rural business owners to:
· Write to your MP immediately – Let them know how these changes will affect your family, your business, and your community
· Invite your MP to visit – Show them the reality of family farming and rural business operations
· Share your story – Help MPs understand the human cost, not just the statistics
For more information about the inheritance tax changes and how to contact your MP, visit www.cla.org.uk
