WARWICKSHIRE County Council is asking the government to exempt family farms from new inheritance tax rules following an emotionally-charged debate.
Councillors of all parties except Labour backed a motion last week to write a letter opposing controversial new caps on agricultural property relief (APR) and business property relief (BPR).
The meeting at Shire Hall was attended by Warwickshire farmers who parked a tractor outside while two presented their case, including one who had to fight back tears as he expressed his fear that his dad could become another farming suicide statistic.
Charles Goadby, a farmer from Ansley, west of Nuneaton, told councillors that he is one of three brothers that runs a farm in partnership with their 80-year-old father, the main landowner who took on the site in 1960.
Starting with six cows – four of which were bought on finance – they built a family business over many years by investing all spare money back into the business. He estimates that the new rules would land them with an annual inheritance tax bill of between £180-£200 per acre for 10 years.
Cllr Penny-Anne O’Donnell and farmer Charles Goadby make their point outside Shire Hall, in Warwick.
That is set against an average profit from farming £126 per acre – earnings that he expects to fall to £65 per acre next year due to a drop in farming grants.
“With returns on capital investment so low – below half a per cent – farming and food production is more a vocation than a business,” he said.
“We would be forced to sell land to pay the inheritance tax and then additional land to pay for the capital gains tax on the land we have sold.
“What my father has built will be lost. Lost but not gone. Every day it would be there in plain view. He is a proud man and that would destroy him.
“Already it has been reported that seven farmers have taken their own lives since the budget as a result of this policy. I fear my dad, along with many more, will add to that statistic.”
He also argued the likeliest buyers of land would be wealthy investors seeking to avoid other new taxes following the removal of non-dom status and pension relief.
Limitless APR and BPR has been around for decades, but the government proposes to bring in a cap of £1 million, meaning any land or farming property value above that will trigger a 20 per cent inheritance tax bill.
It can be paid over 10 years interest free and land and property can be transferred without incurring fees provided it happens seven years before death. Additional household tax and married couple allowances may increase the threshold, to up to £3 million for some.
Cllr Chris Kettle (Con, Feldon) argued the policy had not been thought out, claiming that the treasury had not consulted the Department for Environment, Food & Rural Affairs (DEFRA).
“Had they done so, they might have been better informed,” he said. “I understand that the practical benefits of passing businesses down generations will carry no weight with those who are not interested in such matters, although family businesses and farms are the bedrock of this nation.
“The UK agricultural sector produces 60 per cent of the food we consume and delivered a gross added value of £13.7 million in 2023, directly employing 462,000 people.”
He added: “Farmers do not own land in the normal sense. They can’t take it with them, they can’t export it, hold it, but they can look after it. They manage it to the best of their ability and look after it for the next generation. That will end for good.”
Green group leader Cllr Jonathan Chilvers (Leamington Brunswick) questioned some of the data used by the Conservatives who put forward the motion.
The numbers are a constant battleground on this issue with DEFRA suggesting only 500 farms per year will be affected and the government anticipating that only the biggest 27 per cent will pay any tax.
The National Farmers’ Union (NFU) says that land prices and the high and increasing value of assets will push that up to two-thirds of farms.
The Conservative motion predicted it would affect 1,700 family farm holdings in Warwickshire alone, “leaving the average farming family with a tax bill of at least £240,000”.
“I am concerned by some of the facts and figures,” said Cllr Chilvers.
“On such a sensitive issue, we have a deep responsibility and duty to make sure we present figures in a fair way.”
He did, however, express support for the principle of the motion and voted for it following the debate.
Cllr Sarah Feeney (Lab, Benn) pointed out that the previous Conservative government “did nothing” to address issues related to the profitability of farming or lost European Union (EU) subsidies following Brexit.
“The farmers who spoke earlier made the issue clear, the system has been wrecked for a number of years,” she said. “Let’s not forget the Conservative government’s trade deal with New Zealand that has made sheep farming pretty unprofitable, undercutting our farmers’ ability to sell lamb profitably.”
She also cited the need to fix public finances and highlighted £5 billion funding for farmers over the next two years.