- 41% of farmers in Gloucestershire county expect their farm to be unsustainable within five years, with 61% believing their farms will become financially unviable by 2035.
- Nearly 1 in 10 farms in the county expect to face an inheritance tax bill of over £1 million, with 31% expecting a bill of over £500,000.
- More than half (53%) believe they will have to sell off at least half their farm business to pay their IHT bill.
Nearly half (41%) of Gloucestershire’s farms could go out of business in the next five years, rising to 61% by 2035, according to a new study on the impact of the Labour Government’s changes to inheritance tax (IHT).
Recently the government doubled down on its decision to press forward with its inheritance tax changes during a meeting with the National Farmers Union (NFU), Tenant Farmers Association (TFA), Country Land and Business Association (CLA) and Central Association of Agricultural Valuers (CAAV). The decision comes ahead of the NFU’s annual conference on the 25th February.
There are 3,058 commercial farm holdings in Gloucestershire, with 224,262 hectares of land being farmed in the county, 74% of Gloucestershire’s total land area. From 6th April 2026 Agricultural Property Relief (APR) will see 100% relief from IHT restricted to the first £1 million of combined agricultural and business property. Above this amount, landowners will pay up to 20% IHT, paid in instalments over 10 years, interest free, and a couple can pass on up to £3 million free of inheritance tax.
Farmers’ Family Farm tax bill over £1 million
The new data is based on 100 Gloucestershire farmers, part of a larger study involving 2,000 British farmers and commissioned by finance and mortgage advisory firm Ashbridge Partners. Nearly one in 10 farmers in Gloucestershire say they will face an IHT bill of over £1 million due to the inheritance tax hike, with more than a third (31%) expecting to pay over £500,000.
At the average Farm Business Income (FBI) level, it would take inheritors 11 to 12 years to pay off an IHT bill of £1 million – more than the Government’s 10-year instalment option. The average FBI was £86,000 across all farm types in Great Britain, according to 2022/23 Defra data, with 17% failing to make a positive FBI that year and only 41% making over £50,000.
Furthermore, only 37% of local farms polled by Ashbridge Partners expect to fall below the proposed tax relief caps – leaving the equivalent of 1,927 of the county’s farms above the threshold – a stark contrast to even the Government’s national estimates of ‘significantly less than 500 estates per year.’
In total, 63% of the county’s farmers worry that their business won’t be financially sustainable in the future if ministers forge ahead with their plans, with a further 9% unsure.
Olly Harrison, British farmer and influential farming voice, said: “Any politician’s priority should be to keep its nation fed. I’m shocked by the lack of understanding by government of what UK farms do, three times a day, every day for everybody in the country. These are scary times and not just for farmers. The question is, will we see ration books again or even a ration app?”
Selling off land and assets
To cover the cost of their inheritance bill, nearly half (49%) of the local farmers surveyed will have to sell off at least half their farm business with 38% selling off farmland.
When asked who they would likely have to sell their land to, nearly two thirds (62%) of Gloucestershire farmers believe they will end up selling to UK and International Corporations or ‘Tycoons’ – potentially threatening the future of UK farmland staying in the hands of traditional UK farmers. Previous industry reports indicate that, in the last 12 months, private and institutional investors, along with “lifestyle” farmers, account for more than half (53%) of agricultural land purchases in England. Just 47% of acquisitions were from traditional farmers. In the county, 59% of Gloucestershire’s farmed land is owned by the farmers managing it.
Searching for capital
In response to the government’s Inheritance tax plans, in November last year approximately 13,000 farmers descended on the capital in protest. Subsequent rallies in December, January and earlier last month saw hundreds of tractors line the streets of central London and city centres around the country, as the sector contemplates the reality of having to sell their business or assets to cover the ‘Family Farm Tax.’ According to Ashbridge Partners’ research, 18% of Gloucestershire county farmers said they will have to sell agricultural buildings, 6% will need to sell vital machinery, and 2% are considering selling other properties, while 24% said they will need to liquidate shares and future investments. More than one in ten (11%) will have to go as far as to sell the farmhouse and 21% also reported that their farm shop could be at risk of sale.
Mark Ashbridge, Managing Director of Ashbridge Partners, said: “The proposed changes could dramatically affect farming families and businesses. With over half of UK farms at risk in the next 10 years, these policies simply aren’t affordable or sustainable for the majority of farmers. If these proposals go ahead, we expect to see a wave of farmers seeking loans and exploring other forms of raising capital to cover these IHT costs, which, when you take into account the average farm is making £86k a year, again brings into question the viability of these tax changes.”
