Independent readers left divided over Labour’s ‘tractor tax’ on inherited farms

Labour’s proposed inheritance tax reforms have sparked intense debate among Independent readers, with opinions sharply divided over their implications for farmers and the broader economy.

The reforms, targeting agricultural estates worth over £3m, aim to close loopholes allowing wealthy investors to avoid taxes but risk sweeping up many family-run farms in the process.

Some readers expressed cautious support, highlighting the need for fairness in the tax system. They argued that too many large estates have historically benefited from excessive reliefs. One described the proposal as “a long-overdue change” to curb speculative land buying and ensure the wealthiest pay their fair share.

Others praised the government for balancing protections for smaller farmers while targeting abuses by investors and aristocratic estates.

However, critics warned that the reforms could devastate “land-rich, cash-poor” farmers, many of whom lack the reserves or profits to meet these new obligations. Concerns were raised over the potential for miscalculations in the policy’s design to unfairly burden struggling farms, particularly given the rising costs of equipment and land.

Here’s what you had to say:

I support the new tax fully. It is ridiculous that wealthy farmers have whipped this up into a protest. The 20 per cent rate is only paid on estates worth £3 million or more, and they have 10 years to pay it. For everyone else, it’s 40 per cent with no delay.

It’s ludicrous for tenant farmers to support the 100 wealthiest landowners in the country. It’s like a factory worker complaining that a manager’s million-pound bonus isn’t enough. Many farmers also voted for Brexit, which destroyed the economy and created gaping holes in public finances. The Labour Government is right to ensure those with the most contribute to public services.

Gary Hills

The majority of farmers, according to their own industry’s periodicals, voted for Brexit. By doing so, they lost generous EU subsidies, and Boris Johnson’s replacement was a fraction of what they used to receive. This fuels resistance to paying IHT, but they brought it on themselves.

Brexit left us with dearer food, more inflation, red tape costs for small firms, and a £50 billion tax loss annually. All of this means the government is struggling to pay for public services like the NHS and education and local councils, of all political colours, are in or near bankruptcy.

Money has to be found somewhere. I don’t think we can shed too many tears for the likes of Jeremy Clarkson, who allegedly has said he only bought his four million farm as a tax dodge. And let’s get one thing straight: the IHT will be paid at 20 per cent on farms worth over a million, half the rate other businesses have to pay. When one considers the spouse-to-spouse and spouse-to-child allowances, it means an effective three million in allowances before IHT has to be paid.

Somehow I don’t think your average British wage earner will be losing sleep over “poor” farmers, despite the best efforts of the right-wing press.

Petrovonoc

As someone whose husband has worked in agriculture for 55 years, we do not support this demo. Land prices have soared since 1985, putting land out of reach for budding farmers.

Maybe now they will have the chance to buy and improve produce choices, as French farmers do.

Jol

I am inclined to support what seems to me to be a tax levy on a group in society that likely can withstand it. The present government is faced with the unenviable task of repairing the damage to our economy and in line with their proclaimed strategy this is part of it.

As a pensioner who doesn’t qualify for the winter fuel payment under the new rules and, though not particularly wealthy, I do not resent giving it up if is going to help.

InterestedObserver

The use of Agricultural Property Relief (APR) and Business Property Relief (BPR) complicates this issue, and even government officials disagree on its impact. Single-parent farmers, such as those divorced or widowed, are disadvantaged because they cannot share allowances with a spouse.

The government should acknowledge its hasty approach, while farmers should avoid protests that could undermine public support. The NFU and other farming bodies should offer to collaborate with the government on devising alternative approaches, such as a farm residency requirement, or conditions tied to nature-friendly farming, or heirs’ commitments to continue farming. Successful reform could lower land prices and encourage new entrants – essential for the sector’s future. Without such a rapprochement, the populist right may exploit this for political gain. Reports of groups like Tommy Robinson’s supporters joining protests highlight the potential for political manipulation.

Beleaguered

I don’t support this because farming land is a national asset held in trust.

While they could, nominally, cash in by selling, for the most part they don’t, because they have an attachment to their forebears. Their industry is also very high risk, and they are squeezed between uncertain weather and rapacious supermarkets. If Starmer went after the bankers first, and then the supermarkets and after that the farmers I’d maybe think differently.

Kenhubert

This tax won’t hit the ultra-rich, who offshore their wealth, but it will hurt smaller farmers who maintain the countryside. These farmers work tirelessly, yet their sons face a huge bill because land prices are rising. If they sell, it will lead to corporate farming and damage the rural economy.

ListenVeryCarefully

I fully support the tax. The thresholds and repayment terms are fair and generous. Farmers will still benefit from significant exemptions compared to other businesses.

DeadGod

Farmers have avoided paying their fair share for too long. Everyone else pays 40 per cent IHT, but farmers will only pay half that, with 10 years to pay.

It’s time they contribute to schools, hospitals, and infrastructure like the rest of us.

Lara999

The rest of the public pays IHT on large inheritances. Farmers’ complaints are moot, as the average farm size is below the threshold to trigger this tax.

Wealthy landowners using farmland to avoid IHT have caused this reform.

CaptainSensible

The aristocracy and plutocracy are shocked by Labour’s baby steps toward land reform. Farming needs support for real farmers who work their land, not absentee owners in Monaco.

The system should encourage fair prices and sustainable farming.

Erbium

The theory may work for bigger farms but could force sales of typical family farms, reducing their viability.

It’s unlikely to affect the very wealthy who use trusts or offshore companies.

Patrickc

When I inherited my father’s estate, I had to pay a fair amount of tax. If farmers have been exempt while the rest of us pay, it’s unfair.

Rizla2956

Agricultural land prices are inflated because of IHT avoidance. If land prices fall, fewer people will be affected.

Farmers need to join the real world and stop complaining.

Hard Rain

The public will not sympathise with farmers protesting this tax. They voted for Brexit, creating today’s economic struggles, and they should now pay their fair share like everyone else.

ChristineofBradford

All other businesses pay IHT, and farmers have had a better deal. Clear, neutral data would help clarify whether their complaints are justified.

49niner

This is not a “tractor tax”; it’s inheritance tax.

Farmers should be glad a loophole is being closed, making the system fairer.

Kenny

Food security is essential, and undermining farming should be avoided.

If farms must be taxed, set the threshold much higher—£15 million, not £3 million.

9Diamonds

Drowning farmers in taxes will lead to corporate farming, as in the US.

If you care about animal rights, the countryside, or environmental stewardship, oppose this tax.

Paul

European countries have systems to reduce IHT on farmland if it remains in family farming for a set time.

Perhaps the UK could consider similar strategies.

NellyNelly

It’s both a necessary fiscal reform but one that could devastate family-held large farms. I do support inheritance tax being levied on large farms. Since Thatcher, farms have had various schemes of tax relief, and IHT was also abolished. Large farms have been passed down the line tax-free. It’s time IHT was paid! Without reform, agricultural land has been a very good investment. Just look at Clarkson and Dyson, who are large farm owners! Purchasing agricultural land has been a great way to shelter wealth as well.

However, where I do support the “tractor tax”, I have a few concerns. Reeves has miscalculated how many farms will be affected by failing to include both forms of tax relief, which means the number of farmers swept up by the IHT net will be much higher. Furthermore, Reeves has not closed the tax loopholes exploited by wealthy investors who are anything but farmers or addressed the tax breaks claimed by aristocratic farm estates!

In my opinion, the reform to levy IHT on large farms is an important one. However, Reeves’ miscalculations could well lead to the impoverishment of many farmers who are land-rich and cash-poor. As so many farmers voted for Brexit, it’s hard to feel sympathy. Nevertheless, the UK does need its farmers (not greedy farmland investors or the aristocracy), so there’s a need to be careful not to cut off one’s nose to spite one’s face, so to speak.

Benitas

The proposed tax seems a good one to me. The exemptions limit the impact on the majority of farms and still allow considerable benefits (20% rate, 10 years to pay, no interest applied) not available to the majority of our population. Farmers can hand over ownership sooner, either all or a fixed percentage, to bring their liability back within limits, as well as using trust arrangements.

If the government has got it wrong, land values will fall, and yet more farmers will qualify for IHT relief. This is a long-overdue change that may limit speculative land buying by non-farmers for IHT avoidance purposes. I thought it was ridiculous for Victoria Atkinson to suggest on This Morning that farmers earning £24k per year were going to be caught in this. It’s a pretty poor business if your return on a million-pound investment is only £24k and only further reflects the distortion in land prices arising from IHT avoidance.

Freddy2shoes

I’m the daughter of a farmer, and my brother and his son are farmers too. The government is absolutely right, and this tax is pitched perfectly to catch out the very wealthy business folk (and many Conservative MPs!) who are taking advantage of this tax perk to shelter assets above £3m. The rich can even let out farms to tenants and STILL get the perk in FULL.

For heaven’s sake, most real farmers have massive mortgages (which help keep their farm’s net value below £3m) and then struggle to acquire new land at extortionate prices because it is being snapped up by the wealthy. The government should hold its nerve—they have balanced it absolutely right... and I don’t say that lightly.

MaryS

I do not support Starmer. Though I am a socialist, I am behind the farmers. I believe Starmer and Reeves have fixed the figures. They say a couple will be able to claim £1 million each, so one + one + the million for the property = £3m. However, most people writing a will are single, so that’s a million gone for a start.

Then there’s the actual price of land (of which I know little) and of cattle, etc. But farming equipment is enormous—one combine harvester costs, what did the press quote, half a million? I think inheritance tax stinks all in all, to be honest (except for the aristocracy, who could pay off the UK’s debt thrice over and still be stinking rich). But for farmers? Farmers are literally our daily bread and butter; without them, none of us could live.

They used to get subsidies for looking after the land from the EU—that’s all gone. They may have a lot of money tied up in buildings, land, cattle, and equipment, but that doesn’t mean they have a lot of ready capital. Starmer and his hypocritical crew know this, which is why they are saying that IHT can be offset by donating the property over seven years to their kin. In other words, elderly people are not permitted the autonomy or security to live in their OWN homes! And now we are told farmers have to fund the NHS. NO! National Insurance should fund the NHS! Taxpayers as a whole should fund the NHS. That’s why we have a tax system.

Maneric

Some of the comments have been edited for this article for brevity and clarity. You can read the full discussion in the comments section of the original articles here.

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