Calls to U-turn on farmer tax as petition exceeds 100,000 signatures in two days

Chancellor Rachel Reeves faced widespread opposition from the farming community after proposing a change to the agricultural property relief (APR) and business property relief (BPR) from April 2026 in a bid to raise more funds for public services.

The Chancellor said she was wrong when she previously said she wouldn’t have to raise taxes before the Labour government’s victory in July. Meanwhile Steve Reed, now Labour’s Defra secretary, told farmers last year that if his party were elected, they had no plans to change agricultural property relief, MSPs said.

Last week’s budget saw the UK’s tax burden reach its highest ever level. For the farming sector, the first £1 million of combined business and agricultural assets will continue to attract no inheritance tax. But for assets over £1 million, inheritance tax will apply with 50 per cent relief, at an effective rate of 20 per cent.

A petition started to urge the the Chancellor to reverse her “devastating” changes reached 105,000 signatures by Sunday evening after it was launched on Friday.

It means the petitions will be considered for debate in Parliament.

Budget documents state the UK Government’s move on APR is to restrict the “generosity” of APR and BPR for the “wealthiest estates”.

But farmers and politicians have hit back saying the announcement showed how “out of touch” the Labour government is with farming.

Scottish Liberal Democrat MP for Orkney and Shetland said farmers are the definition of “capital rich but cash poor.” Meanwhile farming unions have said the move will “deal a hammer blow to farming families, after decades of tightening margins, record inflation, extreme weather and increased production cost.”

Ms Reeves insists “only a very small number of agricultural properties” will be affected.

National Farmers Union Scotland (NFUS) policy director Jonnie Hall, however, warned the move will “be devastating to the vast majority of farms and crofts.”

The petition, launched by the Conservatives, said: “Many family farms will be impacted because while lots of smallholdings and houses with a few acres let for grazing might be okay, very few viable farms would be worth under £1m. 

“Farmers are often cash poor even if on paper their farms are valuable when sold. 

“Join the growing call to overturn this policy.”

Ms Reeves was played a clip of Rebecca Wilson, a fifth-generation farmer from Yorkshire, on the BBC’s Sunday With Laura Kuenssberg programme.

Ms Wilson said: “On paper our farm is a valuable asset. But farmers like us often work very hard for very low returns and we rarely have surplus cash in the bank.

“Even using personal allowances, the Chancellor’s proposal could hit us with a tax bill of nearly £1 million when my parents die.”

Ms Reeves responded with details of APR, adding: “So you can pass on without paying any tax, for most cases, a farm worth £3 million.

“After that the tax rate for inheritance tax for agricultural property is 20 per cent compared to 40 per cent that everyone else pays, and you can pay that over a 10-year period interest-free.”

The chancellor added: “I hope that Rebecca and her family will look through the details because, if the farm is owned by two people, you have £3 million essentially tax-free and then the tax rate is a 50 per cent discount on everyone else and you would have 10 years to pay it.

“So only a very small number of agricultural properties will be affected, but last year the benefits of agricultural property relief, 40 per cent of the benefit was felt by 7 per cent of the wealthiest land owners.

“I don’t think it is affordable to carry on with a relief like that when our public finances are under so much pressure.”