Four in 10 Gloucestershire farms "could go out of business by 2030" due to Inheritance Tax changes
Nearly half of Gloucestershire’s farms could go out of business in the next five years, rising to 61 per cent by 2035, according to a new study on the impact of the Labour Government’s changes to inheritance tax (IHT).
The new data is based on 100 Gloucestershire farmers, part of a larger study involving 2,000 British farmers and commissioned by finance and mortgage advisory firm Ashbridge Partners. Nearly one in 10 farmers in Gloucestershire say they will face an IHT bill of over £1 million due to the inheritance tax hike, with more than a third (31%) expecting to pay over £500,000.
Last week the government pressed forward with its inheritance tax changes during a meeting with the National Farmers Union (NFU), Tenant Farmers Association (TFA), Country Land and Business Association (CLA) and Central Association of Agricultural Valuers (CAAV). Dubbed the ‘Family Farm Tax’, the decision was met with stark warnings by NFU president Tom Bradshaw and came ahead of the NFU’s annual conference today.
In his opening speech at today's conference, Tom said: "The Family Farm Tax is morally wrong because of the real, human impact it’s having - now, today. As President of the NFU, I have received hundreds of desperate messages, taken hundreds of panicked calls.
"Today, I worry about the tenant farmer whose home and livelihood may be taken away, because a landlord is often better off taking their land back in hand.
"I worry about former tenants too. People who have scraped everything together, risked it all to finally buy their farm. They are now facing an unpayable bill."
He added the tax is economically wrong too. "The agricultural valuers say so. The CBI says so. Even Labour’s own tax advisers say so.
"And in an unprecedented move, thanks to lobbying from the NFU, all of the UK’s major supermarkets have called for the government to pause and consult."
Responding to farmer's anguish and outrage, the government has today announced some placatory new reforms. These include
Extending the Seasonal Worker visa route for five more years giving farms an assured pipeline of workers and ensuring that government catering contracts favour high-quality, high-welfare products that local farms and producers are well placed to serve.
Also announced was £110 million investment in technology: The Farming Innovation Programme which supports research and development of agri-technology for farmers, for example the chemical free cleaning for integrated milking equipment, which lowers energy costs and chemical use.
Steve Reed, Secretary of State for Environment, Food and Rural Affairs said: "The underlying problem is that farmers do not make enough money for the hard work and commitment they put in.
"I will consider my time as Secretary of State a failure if I do not improve profitability for farmers across the country."
There are 3,058 commercial farm holdings in Gloucestershire, with 224,262 hectares of land being farmed in the county, 74 per cent of Gloucestershire’s total land area. From 6th April 2026 Agricultural Property Relief (APR) will see 100 per cent relief from IHT restricted to the first £1 million of combined agricultural and business property. Above this amount, landowners will pay up to 20 per cent IHT, paid in instalments over 10 years, interest free, and a couple can pass on up to £3 million free of inheritance tax.
At the average Farm Business Income (FBI) level, it would take inheritors 11 to 12 years to pay off an IHT bill of £1 million – more than the Government’s 10-year instalment option. The average FBI was £86,000 across all farm types in Great Britain, according to 2022/23 Defra data, with 17% failing to make a positive FBI that year and only 41% making over £50,000.
Only 37 per cent of local farms polled by Ashbridge Partners expect to fall below the proposed tax relief caps – leaving the equivalent of 1,927 of the county’s farms above the threshold – a stark contrast to even the government’s national estimates of ‘significantly less than 500 estates per year.’
In total, 63 per cent of the county’s farmers worry that their business won’t be financially sustainable in the future if ministers forge ahead with their plans, with a further 9% unsure.
Olly Harrison, British farmer and influential farming voice, said: “Any politician's priority should be to keep its nation fed. I’m shocked by the lack of understanding by government of what UK farms do, three times a day, every day for everybody in the country. These are scary times and not just for farmers. The question is, will we see ration books again or even a ration app?”
To cover the cost of their inheritance bill, nearly half (49 per cent) of the local farmers surveyed will have to sell off at least half their farm business with 38% selling off farmland.
When asked who they would likely have to sell their land to, nearly two thirds of Gloucestershire farmers believe they will end up selling to UK and International Corporations or ‘Tycoons’ – potentially threatening the future of UK farmland staying in the hands of traditional UK farmers. Previous industry reports indicate that, in the last 12 months, private and institutional investors, along with "lifestyle" farmers, account for more than half (53%) of agricultural land purchases in England. In the county, 59 per cent of Gloucestershire’s farmed land is owned by the farmers managing it.
Mark Ashbridge, Managing Director of Ashbridge Partners, said: “The proposed changes could dramatically affect farming families and businesses. With over half of UK farms at risk in the next 10 years, these policies simply aren’t affordable or sustainable for the majority of farmers. If these proposals go ahead, we expect to see a wave of farmers seeking loans and exploring other forms of raising capital to cover these IHT costs, which, when you take into account the average farm is making £86k a year, again brings into question the viability of these tax changes.”
