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What are the new inheritance tax rules for farmers in the UK?
Starting April 2026, the UK government will impose a 20% inheritance tax on agricultural assets valued over £1 million. This marks a significant shift from previous regulations that allowed agricultural properties to be passed down without incurring such taxes, raising concerns about the sustainability of family farms.
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How will these tax changes impact family farms?
The new inheritance tax rules are expected to have a profound impact on family farms, with many farmers fearing that the financial burden could lead to the 'death of the family farm.' Farming organizations warn that these changes could threaten the viability of small family operations, particularly in rural communities.
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What are farmers saying about the government's budget?
Farmers have expressed outrage over the government's budget changes, with many feeling that the government is out of touch with the realities they face. One farmer stated, 'I wouldn’t think the government has any idea' about the pressures on agricultural businesses, highlighting a widespread sentiment of discontent among the farming community.
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Are there any alternatives to support farmers facing these changes?
In light of the new inheritance tax rules, farmers and agricultural organizations are calling for alternative support measures. Suggestions include increased funding for environmental initiatives and financial assistance programs aimed at helping small family farms adapt to the new tax landscape.
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What does the government say about these changes?
Chancellor Rachel Reeves has defended the changes, claiming that they will protect smaller farms and that three-quarters of cases will remain unaffected by the new tax structure. However, many farmers remain skeptical, fearing that the new rules will disproportionately impact small family operations.
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What is Agricultural Property Relief (APR) and how is it changing?
Agricultural Property Relief (APR) previously allowed agricultural properties to be passed down without incurring inheritance tax. The recent budget changes will alter this relief, making it more challenging for family farms to transfer assets without facing significant tax liabilities.