The CLA has condemned the Chancellor’s Budget after Rachel Reeves froze the farming budget – a cut in real terms – and capped agricultural property relief (APR) and business property relief (BPR).
In Labour’s first Budget in 14 years, the government has hit vital inheritance tax reliefs and kept the agriculture budget at the same level since 2014.
From April 2026, the first £1m of combined business and agricultural assets will continue to attract no inheritance tax, but for assets over £1m inheritance tax will apply with 50% relief, at an effective rate of 20%, the Chancellor confirmed,
The CLA will be making urgent representations to the Treasury on how this will affect 70,000 farms.
Inheritance tax reliefs – ‘a betrayal’
On inheritance tax reliefs being capped, Country Land and Business Association President Victoria Vyvyan says:
“Labour has made repeated assurances over the last 12 months that it would not tamper with inheritance tax reliefs, and its decision to now rip the rug from under farmers is nothing short of a betrayal.
“This puts dynamite beneath the livelihoods of British farming, and flies in the face of growth and investment. We estimate that capping agricultural property relief at £1m could harm 70,000 UK farms, damaging family businesses and destabilising food security. In its attempts to raise more revenue the government will cause great damage, jeopardising the future of rural businesses up and down the country.
“Many farmers, operating on slim margins, will now face having to sell land to pay inheritance taxes. At a time of profound change in the industry, adjusting to new agricultural policies, the government is offering no vision for a positive economic future for us in the rural community. We will continue to argue the case for these vital reliefs.”
Agriculture budget – ‘done nothing for the countryside’
On the farming budget, Victoria says:
“The government was elected on a promise of growth, but has done nothing for the countryside but freeze the agriculture budget and raise taxes.
“The decision to freeze the budget at the same level since 2014 – a cut in real terms – will have consequences for hard-pressed farmers, consumers and the environment. It will damage confidence and stability across the industry, risking farm profitability. It could hit sustainable food production and undermine improvements to wildlife habitats, flood management and access to nature.
“Defra’s proposal to accelerate the end of direct payments would be incredibly damaging to investment in farming and diversified businesses.
“A recent CLA survey found that 80% of respondents said they ‘strongly agreed’ or ‘agreed’ that payments through farming schemes are critical to ensure their businesses stay viable. There is enormous growth potential in the countryside, but we need the government to be working with us, not against us.”
CLA updates and work
The CLA is working hard, fighting on your behalf – brief analysis, support and next steps will be sent to members via email shortly, with more detailed analysis coming in the days to come.
