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\t\tThe Inheritance tax change to farms \u2013 dubbed the \u2018farm tax\u2019 \u2013 sparked protests across the country\t<\/p>\n
A record number of farms closed in the year after the government announced it was ending a carve out<\/a> that allowed farmers to pass down their estates without paying inheritance tax.<\/p>\n According to official data, 6,365 agriculture, forestry and fishing businesses have shuttered over the past year, the highest number since the data started being collected in 2017.<\/p>\n The jump will pile further scrutiny on the government\u2019s decision to end a decades-old inheritance tax relief \u2013 known as Agricultural Property Relief \u2013 that allowed farmland to be transferred down a generation tax-free.<\/p>\n The Chancellor claimed the relief was being abused as a loophole by super-rich landowners to avoid the unpopular levy when she announced the carve out would end in April 2026, in a move that had the support of several leading economic think tanks.<\/p>\n But it sparked a spate of protests across the country, with farmers warning it could spell the extinction of multi-generational farms in the UK and Labour\u2019s political opponents branding it \u2018the family farm tax\u2019.<\/p>\n Tom Bradshaw, president of the National Farmers Union said the high level of closures \u201cunderscores the challenges and lack of confidence\u201d plaguing the UK\u2019s agricultural sector.<\/p>\n \u201cCashflow pressures, extreme weather and global volatility are making it harder for farmers and growers to produce the nation\u2019s food and be profitable while doing it,\u201d he said. \u201cAnd with the family farm tax, many are now facing the possibility of being taxed out of passing their farm to the next generation.\u201d<\/p>\n Inheritance tax change sparks net loss of 3,000 farms<\/p>\n The Office for National Statistics<\/a> data, released on Friday, revealed the majority of closures in the past year took place during the first half of 2025, after Rachel Reeves announced her intention to end the inheritance tax relief. <\/p>\n Just 3,190 firms in the sector were opened over the same period, meaning a record net loss of over 3,000 businesses.<\/p>\n \t\t\t\t\tRead more<\/p>\n \t\t\tUK farmers hit by drought turn to insurance<\/a><\/p>\n Olly Harrison, an arable farmer from the North West, said he could understand farmers were choosing to shutter their businesses in the face of spiralling operational and economic headwinds like the inheritance tax change.<\/p>\n He told City AM: \u201cFarming is difficult as it is, dealing with the many challenges the weather and nature throw at us. When the government throws you a bigger one than them all combined together, you might as well give up.\u201d<\/p>\n