The leader of West Sussex County Council is calling on the government to reconsider changes to Inheritance Tax which he claims will have a ‘devastating impact on many family farms’.
Councillor Paul Marshall has written to the Secretary of State for Environment, Food and Rural Affairs, to help to preserve family farms, farmland, and the environment.
The letter highlights ‘the essential role farmers play in managing our natural landscapes, contributing to biodiversity, protecting our wildlife, flood prevention and supporting sustainable local food systems within West Sussex’.
It follows a notice of motion debate at a meeting of the Full Council on 13 December 2024 where councillors highlighted their concerns about the impact of the changes in West Sussex on family farms and on the environment.
British farmers have expressed significant concern over the impact of inheritance tax on their ability to pass on farms within families. The primary issue is the potential financial burden that inheritance tax can impose on the next generation, which might necessitate selling off portions of the farm or the entire operation to cover tax liabilities. This is particularly problematic for farming as it tends to tie up a vast majority of wealth in land and assets that are not easily liquidated, making it hard for families to preserve their farming heritage and maintain operational continuity.
There are some reliefs available, such as Agricultural Property Relief (APR) and Business Property Relief (BPR), which are intended to mitigate the impact of inheritance tax on farms. However, the eligibility criteria for these reliefs are stringent and often not well understood, leading to cases where families end up facing significant tax bills unexpectedly. The fear of not qualifying for these reliefs adds a layer of uncertainty and stress for many farming families planning their estates.
The dissatisfaction among farmers is also fueled by a perception that the inheritance tax system does not fairly recognise the unique challenges of farming. Unlike many other businesses, farms often require continuous and direct management and involve assets that have been in families for generations, contributing to rural communities and the national economy. Farmers argue that more supportive tax measures are needed to protect these contributions and ensure that farms can continue to operate across generations without the disruptive impact of prohibitive tax charges.
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