IHT will make half of farms unviable, finds new survey

New research shows that half of farmers surveyed believe their farms will become unviable due to the changes to inheritance tax (IHT) relief announced in the Budget. 

Ithers are considering splitting their businesses into smaller units to avoid the tax.

The past week saw over 400 farmers took part in a survey by FieldMouse Research, exploring farmer reaction to the UK government’s plan for scrapping the current template for agricultural property relief (APR).

See also: Farmers in London to protest ‘family farm tax raid’  

It showed that, as well as the threat to the viability of farms, there is also a personal cost, as more than two-thirds of those surveyed said their mental health had been affected by the chancellor’s recent announcement.

All but 8% of the farmers were opposed to the changes and supportive of the protests taking place in London today (19 November), while 80% said their businesses would be affected by IHT.

Over a third said they were considering exiting the industry because the changes to APR no longer make it viable for them to farm.

Actions

Many were considering actions to avoid paying IHT, such as passing the farm on to the next generation earlier than planned – a move which would mean the measure is unlikely to raise the revenue the government anticipates, says Paul Flatters of FieldMouse Research.

Mr Flatters, a consumer trends forecaster, said many were also considering using a trust to side-step IHT, or widening the shareholding in their farm.

While some might suggest that the findings are not surprising, Mr Flatters said what stood out to him was the concern by tenant farmers and others who would not be directly affected.

Some 90% thought the changes would have a long-term negative impact on their neighbours and on the local farming community.

“The people surveyed were not just concerned about what it meant for them and for the current generation, but for what it meant for future generations,” he said.

Farmers also felt let down, Mr Flatters added. “Rather than a sense of anger, there is a sense of disappointment, of sadness.”

FieldMouse Research was formed with the purpose of increasing the representation of rural voices in social, market and opinion research.