Rishi Sunak has pledged to fight Labour’s tax on family farms unveiled in last week’s Budget.
After visiting a family farm business near Northallerton, Mr Sunak said: “Labour’s decision to change Agricultural Property Relief (APR) underlines how little it knows about and understands British farming.”
The MP for Richmond and Northallerton discussed the implications of the change to inheritance tax with Martin Morrison, his wife Gillian, son Ken and his wife Laura at Grange Farm, Hornby, Northallerton.
It is a 500-acre poultry and arable farm, producing eggs and growing wheat to feed the hens.
At the Budget, Chancellor Rachel Reeves announced changes to APR that mean from April 2026, inheritance tax will be restricted to the first £1m of combined agricultural and business property.
Above this amount, landowners will pay inheritance tax at a rate of 20%.
Mr Sunak said: “The Morrisons have built up their farm over a generation, they have invested heavily in it to produce the food we all need and now the future sustainability of the farm is threatened by this family farm tax.
“They face really difficult choices which could mean having to sell land to pay the inheritance tax bill or borrow the money, both of which would impact the viability of the business.”
Mr Morrison, who is chair of the Northallerton branch of the National Farmers’ Union (NFU), described the Budget announcement as a betrayal of British farmers.
He said: “After all that they said before the election, this came as a real shock which the farming community is still trying to get its head round.
“We felt we could see future ahead but this has just knocked our enthusiasm completely. It takes away the incentive to invest and it has a massive impact on the wider business community.
“They talk about the need for the growth in the economy but this just kills farmers’ confidence in developing their business.”
Lucinda Douglas of the NFU North Riding, who also attended the meeting, said Mr Sunak was empathetic and completely understood the grave severity of the situation.
She added: “The NFU is pleased Mr Sunak understands the irreparable damage the changes will have on everyone involved in farming and land management.
“Tenants and landowners alike, no one will be left unscathed by the devastating impact Labour’s changes to IHT will bring.
Mr Morrison has invested and built his farm up from 125 acres over a generation. He rightly questions why he invested and worked so hard to increase his business for the Labour Party to take it all away in a single budget.”
Chancellor Rachel Reeves has defended the changes to the tax system for agricultural businesses.
Ms Reeves said: “You can pass on without paying any tax, for most cases, a farm worth £3 million.
“After that the tax rate for inheritance tax for agricultural property is 20% compared to 40% that everyone else pays, and you can pay that over a 10-year period interest-free.
She added: “Last year only a very small number of farms would have been paying any additional inheritance tax.”
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