Rachel Reeves may not have thought her inheritance tax raid on farmers through, Ed Balls has said.
Family farms will be hit with inheritance tax after the Chancellor unveiled plans in Wednesday’s Budget to scale back agricultural relief on land valued at more than £1 million.
Mr Balls, the former Labour shadow chancellor, said on his Political Currency podcast: “This issue of inheritance tax on family farms, where the limit is a million pounds before you pay inheritance tax, I think this is going to be one of those things which may become a growing issue in the coming weeks and months.
“It’s one of those things where you just wonder: ‘Has the Treasury really thought through all the hard cases?’”
Under the current rules, families can inherit business and farmland assets of any value without paying inheritance tax. But from April 2026, only assets up to £1 million will be tax-free, with assets above this threshold qualifying for 50 per cent tax relief, resulting in an effective 20 per cent tax charge.
Farmers have said this will make it harder to pass their family businesses onto the next generation as many are worth more than £1 million.
They say this could potentially threaten food supply chains in the future.
Jeremy Clarkson, whose Cotswolds farm is the subject of the Amazon Prime series Clarkson’s Farm, condemned the Chancellor’s decision and accused the Treasury of “shafting” farmers.
The National Farmers’ Union (NFU) is organising the rally, which will take place on Nov 19 at Church House in Westminster, central London.
It raises fears that British farmers could emulate their European counterparts with mass action to close motorways and bring traffic to a standstill.
In December 2023, some 10,000 agricultural workers descended on Berlin’s Brandenburg Gate with 3,000 tractors in protest against cuts to fuel subsidies and tax breaks.
Farmers in France have also protested and confronted police over demands for more government support and simpler regulations.
According to Farmers Weekly, Steve Reed, the Environment Secretary, will be invited to speak to explain the Government’s farming policy at the UK rally this month, but it is unclear if he will accept.
Tom Bradshaw, the president of the NFU, who is set to address the event, said: “It’s clear the government does not understand that family farms are not only small farms, and that just because a farm is an asset it doesn’t mean those who work it are wealthy.
“I have said, every penny the chancellor saves from this will come directly from the next generation having to break up their family farm. It simply mustn’t happen.
“There’s still time for the government to accept they’ve got this wrong, and my message to ministers is that they should do the right thing and reverse this awful family farm tax.”
