Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of changes to agricultural property relief on (a) the UK’s food security and (b) trends in the numbers of farms in the next five years.

The Government believes its reforms to agricultural property relief and business property relief from 6 April 2026 get the balance right between supporting farms and fixing the public finances in a fair way. The reforms reduce the inheritance tax advantages available to owners of agricultural and business assets, but still mean those assets will be taxed at a much lower effective rate than most other assets. Despite a tough fiscal context, the Government will maintain very significant levels of relief from inheritance tax beyond what is available to others and compared to the position before 1992.

The reforms are expected to result in up to 520 estates claiming agricultural property relief, including those also claiming business property relief, in 2026-27 paying more inheritance tax. Almost three-quarters of estates claiming agricultural property relief, including those that also claim for business property relief, will not pay any more tax as a result of the changes in 2026-27, based on the latest available data. Where inheritance tax is due, those liable for a charge can in most circumstances pay any liability on the relevant assets over 10 annual instalments, interest-free.

The Government’s commitment to farmers and the vital role they play in feeding our nation remains steadfast. Food security is national security. That is why, despite the fiscal constraints, we have prioritised £5 billion for the farming budget over the next two years. This includes the largest ever amount of funding directed at sustainable food production and nature’s recovery in our country’s history, and £60m to support farmers with the impacts of extreme wet weather.

At the Oxford Farming Conference in January 2025, the Secretary of State for Environment, Food and Rural Affairs set out the Government’s long-term vision to make farming more profitable and put more money in the pockets of British farmers. This includes a set of reforms such as using the Government’s purchasing power to buy British Food, planning reforms to speed up the delivery of farm buildings and other infrastructure which supports food production, and work to ensure supply chain fairness.