How to help your farming clients navigate the 'tractor tax'

·25 min·2 clips

A new 20% 'Family Farm Tax' on agricultural assets over £1 million could force small UK farmers to sell their land.

Host Simini Kiriakou introduces the episode by outlining the new inheritance tax changes to Agricultural Property Relief, dubbed the 'Family Farm Tax', which will impose a 20% tax on agricultural assets over £1 million from April 2026. Guest Tom Bradshaw, President of the National Farmers Union and a fourth-generation farmer, joins to discuss the implications. Bradshaw immediately challenges the government's claim that only 27% of farms would be affected, presenting NFU analysis showing 75% of food-producing farms would be caught. He explains how the government misinterpreted APR data by including non-farming land sales. The discussion covers the lack of planning ability due to a forestalling clause, leaving elderly or ill farmers particularly vulnerable. Bradshaw distinguishes between Agricultural Property Relief and Business Property Relief, noting many farms use both. He reveals farmers are halting investment in response to the tax, threatening future food production when UK farmers currently supply about 60% of domestic food. The conversation touches on how cheap food policies have kept farmer returns at 0.5-1% on capital, making inheritance tax unaffordable. Bradshaw describes the potential collapse of upland farming communities and cherished landscapes like the Lake District. He criticizes the policy for creating a new investor class buying £1 million land parcels as pension hedges, potentially driving up land prices while family farms face taxation that institutions like Oxbridge colleges avoid. For financial advisors, Bradshaw suggests life insurance and trusts as possible mitigations but emphasizes the need to see final legislation. He notes professional advice can cost six figures, diverting funds from farm reinvestment. The episode concludes with Bradshaw's emotional argument that the tax feels like a personal attack on generations of farm-building, contrasting family partnerships with corporations.

As heard by us

A grounded take on how APR changes could reshape advice for farming families and food security.

The Family Farm Tax lands where estate planning, farm balance sheets and Britain's food supply all meet, and the FT Advisor Editor's Podcast keeps that collision practical.

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Why you'd press play

You will hear why a 20% charge on agricultural assets over 1 million is worrying Britain's family farms.

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