Half of farmers say inheritance tax fears threaten long-term future of industry, warns body
Inheritance tax fears could have the future of family farms in Northern Ireland under threat, a body representing the industry has warned.
A survey by the Ulster Farmers’ Union (UFU) found almost half of those who replied believes tax changes have made the person who will inherit their family farm “less willing, less financially able, or both” to take it over.
The UFU’s research found that 49.2% of respondents reported a negative impact on their intended successor, raising concerns about the next generation of farmers and the future of domestic food production.
The survey also revealed that 71.4% of farmers reported reduced confidence in passing on a financially viable farm business, while 88.6% reported increased family stress or worry as a result of inheritance tax changes.
And more than one-third of families expected to receive a six-figure tax bill on inheriting farms from their loved ones.
Earlier this year, new measures massively upping fees on farmland came into force.
Unveiled by former chancellor of the exchequer Rachel Reeves under the premiership of Sir Keir Starmer, after protests and a couple of partial U-turns the reworked system wound up cutting back relief on inheritance tax for farms with land and buildings valued at more than a combined £2.5m.
Many farmers feel the entire idea, from when it was first mooted to the final form it now takes, amounts to an unfair raid on their finances.
According to the UFU’s dairy chair, Cyril Orr, the fears uncovered by the new survey shows growing pressure facing families who have spent generations building businesses for their children to carry forward.
“Behind these figures are farming families who have spent generations building businesses they hoped and dreamed their children would carry forward,” he said.
“Instead, these young people are watching their parents struggle with rising costs, uncertainty and the pressure of keeping their farms viable.
“It is little wonder some are questioning whether they want to take on those same challenges.
“Succession should be about giving the next generation the confidence and opportunity to build on what their families have achieved, not leaving them facing financial uncertainty before they even begin.”
The UFU is now calling for the government to change its policies so that young people can be encouraged into agriculture.
With the UK’s autumn budget due next week, the union has written to MPs presenting their report’s findings and call for action to protect family farm succession, encourage investment and safeguard the future of UK food production.
Said UFU president John McLenaghan: “The next generation should be inheriting opportunity, not uncertainty.
“Family farms are not simply assets on a balance sheet. They are working businesses that support our economy and produce our food.
"Tax policy must recognise the difference between the value of land and the income farms can generate.
“We are looking at a serious long-term risk to agricultural production, rural employment and food security.”