Opposition MPs call for urgent rethink on inheritance tax

Opposition MPs have urged the prime minister to urgently rethink plans for inheritance tax reforms that could devastate family run farms across the UK.

The proposed changes from April 2026, which include a 20% tax on land and machinery worth more than £1m, have sparked widespread concern over their impact on farming, food security, and public trust in the government.

Speaking during a Westminster Hall debate on Tuesday 14 January, Graham Stuart, the Conservative MP for Beverley and Holderness, said the reforms would push small, community-based farms to the brink.

See also: 89,500 farmers to be hit by inheritance tax, says CAAV

He highlighted the case of Bygott House Farm in his constituency, where owners Ian and Rebecca face an inheritance tax bill higher than their annual profits. “Once that farmland is lost, it’s gone forever,” Mr Stuart said, stressing the long-term damage that would be done to family farms.

Manuela Perteghella, the Liberal Democrat MP for Stratford-upon-Avon, warned that the proposed tax could push family farms into the hands of large corporations, further jeopardising the UK’s domestic food security.

‘State theft’

Esther McVey, the Conservative MP for Tatton, branded the policy “state theft”, warning that it could lead to the collapse of the UK farming industry.

“This will hurt the farmers who are already struggling, and it could decimate farming in rural Britain,” Ms McVey said.

Mr Stuart also raised concerns about the toll on farmers’ mental health, an issue already exacerbated by high rates of depression and suicide in the industry. “Adding the threat of crippling inheritance tax bills only worsens an already difficult situation,” he said.

The debate heard that NFU analysis estimates about 2,000 farms a year could be affected by the policy change, a stark contrast with the Treasury’s estimate of only 520 farms.

Wider threat

The reforms were not just a threat to farmers but to other family owned businesses as well, MPs were told.

A report by the Confederation of British Industry (CBI) forecasts a £1.2bn drop in revenue and the loss of 125,000 jobs over the next four years. Mr Stuart urged the government to learn from Sweden, which abolished inheritance tax in 2004 after it negatively affected entrepreneurship.

With just over a year before the reforms take effect, Mr Stuart called on the prime minister to reverse course, warning that failing to do so could result in a loss of trust among rural voters. “This is not just a policy failure – it’s a failure of trust,” he said. “If they fail, they risk losing that trust forever.”

Opposition MPs also criticised Labour for not sending any rural MPs to the debate, leaving Treasury minister James Murray to defend the government’s position.

Mr Murray argued that while the reliefs would remain, they must be targeted more fairly. “It is not sustainable to maintain such a large tax break for such a small number of the wealthiest claimants,” he said.