Support our farmers in Sussex: the government’s controversial new inheritance tax laws explained

Chancellor Rachel Reeves announced in the Autumn Budget on October 30 that from April 2026 inherited agricultural assets worth more than £1million, which were previously exempt, will be liable to inheritance tax at 20 percent.

HM Treasury said: “The full 100 per cent relief from inheritance tax will be restricted to the first £1million of combined agricultural and business property. Above this amount, landowners will pay inheritance tax at a reduced rate of 20 per cent, rather than the standard 40 per cent.”

HM Treasury said this tax could be paid in instalments over 10 years, which would be interest free, instead of being paid immediately like other kinds of inheritance tax.

They said: “This is on top of all the other spousal exemptions and nil-rate bands that people can access for inheritance tax too. This means that two people with farmland, depending on their circumstances, can pass on up to £3 million without paying any inheritance tax.”

More than 60 farms in Lewes could be hit by new ‘family farm tax’ as MP calls decision ‘a disastrous blow’

The government has said it is committed to supporting farmers and rural communities, and to helping families pass their land to the next generation.

But the announcement has been met with disappointment by some.

The National Farmers Union has called the Budget ‘a blow to British farmers’ that could lead to food price rises.

Bexhill – Town's MP says Chancellor's inheritance tax spells 'death knell' for family-run farms

NFU President Tom Bradshaw said at /www.nfuonline.com: “This Budget not only threatens family farms but will also make producing food more expensive. This means more cost for farmers who simply cannot absorb it, and it will have to be borne by someone. Farmers are down to the bone and gristle, who is going to carry these costs?

He said: “When you look farmers in the eye and make them a promise, keep it. The shameless breaking of those promises on Agricultural Property Relief will snatch away much of the next generation’s ability to carry on producing British food, plan for the future and shepherd the environment.”

The MP for Lewes James MacCleary warned this week that 66 farms in his constituency could be hit by the tax. He said: “This government’s new tax on family farms is a disastrous blow that risks undermining these essential pillars of our rural economy.”

Sussex World is asking for your thoughts on this issue and hopes to speak to farmers, MPs and councillors over the coming weeks. If you work in agriculture and want to tell us your views email [email protected].