Money Blog: Home Prices Hit Record Highs; Interest rate cuts are all but inevitable – but is there another inflation headache on the horizon?

Farmers transferring land used for agricultural purposes previously did not pay inheritance tax.

But from April 2026, as the Chancellor announced in last week’s Budget, any value over £1 million will be taxed at an effective rate of 20% (inheritance tax threshold of 40%, but with tax relief of 50% ).

The National Farmers’ Union warned it could force farmers to borrow money or sell plots of land to pay inheritance tax.

To explain why farmers are so unhappy, we spoke to Pat Thornton, a third-generation farmer from North Lincolnshire, for whom the £1 million threshold is not enough.

He told Money that the Budget announcement was a “very dark day” for the industry.

“Our wealth is in our land,” he said, explaining that farmers have historically been “asset-rich and cash-poor” – with his machinery alone costing more than £1 million.

Pat estimates the 350-acre farm he runs with his elderly father is valued at between £3 million and £4 million, which could leave him facing £400,000 in inheritance tax.

But despite having such wealth in assets, extreme weather conditions have meant he hasn’t made any money over the past two years.

“And on a farm, unfortunately, death can occur in very tragic circumstances – and completely unexpectedly – so you don’t have a coffer of money to pay the bills that come in.”

But selling land to pay those bills can make farms so small that they become unviable, Pat says.

Robert Morse, partner Personal accountan independent financial planning firm, told Money: “There is an assumption that because there is a value to an asset, you can tax it.

“But actually, as a business, it makes very little profit. And most wise farmers reinvest those profits back into the farm – they don’t have that kind of money just sitting in the bank.”

The government insists the changes will affect only a small number of farms, but the country’s Land and Business Association believes up to 70,000 farms could be affected. According to official figures, there are approximately 209,000 farms in the UK.

Three farm workers die by suicide every week

Every week, three people who work in farming and farming commit suicide, according to the British Association for Counseling and Psychotherapy. The suicide rate among male farmworkers is three times the national average.

And Pat fears things will only get worse.

“One suicide a week is too many,” he said. “It’s another factor in our stress levels that we could really do without.”

Standing on his tractor as he prepared to plant crops he had been unable to plant earlier this year due to weather, he said he was wondering if farming was worth continuing.

“Why am I still doing this? It becomes increasingly difficult to remember why.

“Support has disappeared – not only financially, but this week the moral support also seems to have disappeared.”

Given that around 40% of the UK’s food supply is dependent on imports, Pat said he couldn’t understand why the new government didn’t want to prioritize farming.

What Farmers Can Do to Mitigate Huge Tax Bills

Because farming is traditionally a family business, succession conversations become even more difficult, but doing so sooner rather than later can prevent additional costs.

Robert told us that farmers “don’t have to pay a lot of taxes” and “you can definitely structure it so you don’t have to pay taxes.”

Under inheritance tax rules, houses, land and buildings can be gifted (for example, a farm can be gifted to an heir) provided you live for another seven years.

“But if you make that gift and don’t live for seven years, that could be a problem,” he said, explaining why it’s important to have these conversations sooner rather than later.

He cited a quote from former Labor Chancellor Roy Jenkins, who called inheritance tax “a voluntary levy paid by those who distrust their heirs more than they dislike the Inland Revenue”.

“There needs to be a reasonable conversation about who will take over,” he said.

Pat said those conversations with his father were “incredibly difficult.”

“I started talking and he left. But he just needed to shut up, and over time he saw that we had common goals.”

Robert said older generations can no longer leave succession plans to chance: “You can either have a say in what happens or you can just leave it to chance.”

Random fate and huge taxes.