Half of UK farms pause investment over inheritance tax changes

Almost half of family farms in the UK have paused or cancelled planned investment on their farms in the wake of changes announced to agricultural property relief and business property relief by the Labour government, according to a new survey.

More than 4,000 businesses and farms across the UK took part in the survey, which was conducted by independent consultancy CBI-Economics.

From April 2026, the 100% rate of relief will continue for the first £1m of combined agricultural and business assets, with a reduced rate of relief of 50% for amounts above this threshold.

The survey also revealed that an additional 34% of farms and businesses have deferred or reduced investment already.

Some 14% say they plan to sell off assets or part of the farm. One in 10 farmers surveyed say they've downsized farming operations since the changes to the tax were announced in last year’s budget and 21% plan to do so before April 2026.

Devastating impact

National Farmers Union (NFU) president Tom Bradshaw said the new research “clearly demonstrates what we already know; that the government’s plans for inheritance tax will have a devastating impact on the future of UK family farms, reducing the incentive for farmers to grow and limiting their ability to invest in their businesses”.

“The results from the survey are stark. They show that the proposed removal of agriculture property relief and business property relief have farming businesses on a knife-edge, with investment falling rapidly across the board and the prospect of more than 28,000 job losses within the sector and supply chain over the next five years,” he said.

Bradshaw added that this is creating a significant barrier to growth when farmer confidence is at an all-time low.

Future on the line

“The message to government from this survey could not be any clearer – the future of British farming is on the line. We have the solutions, but ministers must sit down with us and discuss our proposals so we can move forward together in order to protect British farming, British family-run farm businesses and British food,” he said.

Family Business UK CEO Neil Davy said: “Against a backdrop of huge uncertainty in global geopolitics and UK economic growth, these latest data show unequivocally the damage that is already being done to Britain’s family-owned businesses and farms and the wider economy.

“Ultimately, it will be the working people, and communities right across the country who depend on family-owned businesses and farms, who’ll pay the price.”