Farmers across the Garden of England are fearing inheritance tax reforms will tear up the countryside as we know it.
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00:00The Garden of England, home to more than two and a half thousand farms, but with government
00:16reforms shaking up inheritance tax, could all of this be about to change?
00:23Farmers say they simply don't have the cash and they have to sell their land, but could
00:27this see Kent's countryside being filled with mega farms, solar farms or even new build
00:33developments?
00:38These cows are embedded in produced milk that's sold to a multinational company.
00:42Now the dairy farm also has some 500 acres of arable land, they have that to be able
00:48to grow their own maize to feed the cows.
00:52When you take all the assets into account, it values the farm at more than £4 million.
00:58But with changes to inheritance tax they say the HMRC bill for future generations could
01:03be up to £800,000.
01:05My father in law bought this, he came down to Kent from Hereford and bought this as a
01:11farm worker.
01:12He managed to get enough together to buy about this and about the house and 40 acres back
01:18in 1962.
01:19The Labour announced changes a couple of weeks ago, how do you feel about those?
01:23Well very, very sad, it's a detriment to the countryside.
01:29I want to hand it over to my son, we don't make any money out of the place and that's
01:34the whole purpose of being here really is to build a thing up and if we're going to
01:39have to lose half of it, which means losing the whole lot because it wouldn't be viable,
01:45just for a bit of tax, I'm afraid I'm very, very sad.
01:49It's unclear how many farms will be impacted, with government departments estimating different
01:54figures, ranging from 34 to 73%.
01:58But from April 2026, it'll restrict complete inheritance tax relief to the first £1 million
02:06of combined agriculture and business property.
02:09So for example, one person who owns a farm will be able to pass on land and property
02:14valued up to £1.5 million tax-free to a child or grandchild.
02:21How do we get to that figure when it's made up of their standard £500,000 tax-free allowance?
02:27That's what we all get, but then also the reformed £1 million tax-free allowance for
02:33agricultural property.
02:35If all their assets combined are more than £1.5 million, well they'll have to pay inheritance
02:40tax at a reduced rate of 20%.
02:44So if the farm is worth £2 million, that's £100,000 the landowners will have to pay.
02:50And this can be paid in instalments over 10 years, interest-free, rather than immediately.
02:58Back on the dairy farm, the local Conservative MP believes many of her constituents will
03:02have to pay that inheritance tax.
03:06This is really a dairy, a miniature dairy, a miniature parlour, because you can see everything
03:14here.
03:15You can see the cups.
03:16Katie Lamb fears what these reforms will mean for the world of Kent.
03:22The farm might have state-of-the-art technology, but they believe future generations could
03:26be left behind.
03:28These changes that are now coming in, that have been announced in the budget, what do
03:31you think that they'll mean for you here?
03:33You know, it's just added debt.
03:35Yeah.
03:36Well, that's one option, added debt to a family farm that can't afford it, which means
03:44then we've got to then effectively sell 20% of our land.
03:50And then all that does is just, as time goes on...
03:54Give you less land.
03:55Less land.
03:56To be able to cover that.
03:57That's what you've got to realise.
03:58We're never going to...
04:00Mate, I'm a third-generation farmer here.
04:02My daughter here is four.
04:05We are custodians of that land until we're passing it on to the next generation to produce
04:12food.
04:14This is devastating for farmers across Kent.
04:17The changes that the government have proposed in the budget to inheritance tax, to agricultural
04:21property relief and to business property relief will be existential.
04:25A lot of the farmers that I'm speaking to essentially say, why would we bother?
04:29Why would we bother to do all of the hard work that we do growing the nation's food
04:33for this?
04:34And with this inheritance tax change, do you feel there could be more homes on our countryside?
04:40My great worry is essentially that the countryside effectively ceases to exist.
04:44And certainly somewhere like Kent, where because of the proximity to London and because not
04:49enough houses are being built in London and people are being pushed out of the city and
04:53coming to live here, that the incentive will become to sell off the countryside for housing.
04:58And of course, people need somewhere to live, but our rural way of life is integral to our
05:03country and it is beyond price.
05:06And once it's lost, it's lost forever.
05:10So could this really happen?
05:13There are currently several new garden villages already in the pipeline for Kent.
05:18They'll likely see tens of thousands of homes built on agricultural land.
05:23On these fields in Citybourne, there are proposals for some 8,000.
05:28And these campaigners fear the impacts these developments could have.
05:32You know, we're sat on the best countryside, we've got the best climate, but it's very
05:37appealing for a developer to try and develop that this close to London.
05:41We're only an hour away by train from London here, with, you know, top wages, with people
05:47who want to live in the countryside.
05:50You know, soon we're going to be another borough of London at this rate.
05:54It's estimated that the UK is 60% self-sufficient in the food it produces.
06:00Now if you go to your local supermarket, there's a good chance that the apples you buy have
06:05been grown in an orchard just like this one.
06:08But every year, there are more and more orchards and farms across the county being sold to
06:13developers for homes to be built on.
06:15And industry fears with inheritance tax changes, it could become even more common.
06:22The National Farmers Union says the industry is asset rich, but cash poor.
06:26You can see this on Hughes Farm.
06:28Here, it's all about long-term commitments.
06:32These are all single-suckled for cows staying with their mothers for around nine months.
06:37Most of these heifers will go into breeding themselves, whereas the male steers will go
06:42to beef after 24 months.
06:44So it's a long time before Hughes gets any return.
06:47The NFU estimates that on average, capital investment from farmers is less than 1%.
06:54And there are concerns this could force farmers to sell their family farms to pay for the
06:59inheritance tax bill, putting food security at risk.
07:03The government, we know from history and we know from their present attitude, they're
07:08not interested in home-produced food.
07:11They're perfectly happy to have it all imported.
07:13So you're looking at food security is going to go out the window.
07:17Local economy is going to go out the window because the number of industries that ride
07:20on the back of agriculture is quite enormous.
07:22I know we get subsidies, but the subsidies don't come to the farmers per se.
07:27The subsidies go to the supermarkets because they push the prices down and push everything
07:31back on the farmers because they know what subsidy you're getting.
07:34He says people often forget that farming is a business and the last five years have been
07:38particularly challenging.
07:42This roadside shop helps keep his livelihood and others alive.
07:46It keeps the local economy going, it keeps its better value, it's less food miles and
07:53without that you're going to lose your corner shop, you're going to lose your pub, you're
07:56going to lose your greengrocers and all that sort of thing is gone.
07:59And once it's gone you'll never get it back.
08:01It's like we were dairy farming up to 95 and because of the economic constraints and milk
08:06grocers and everything else we had to stop, but you'll never get that dairy farm back.
08:10The investment now to start a new dairy farm is just incredible.
08:13It's the same with machinery.
08:15For a big arable unit you've got to be farming thousands of acres in order to justify the
08:19machinery.
08:21But farmers say it's not just homes they're worried about, their fields could also be
08:26on track for solar farms, land left to fallow and mega farms as a result of the government
08:31reforms.
08:32Colin's been farming for decades, arguably he knows his fields and the sector better
08:39than anyone.
08:40So these inheritance tax changes from the government, what's that going to mean for
08:44Kent Farms?
08:45It will ultimately lead to the breakup of many, many farms.
08:50Chances are it will be bought by investment companies, bigger corporations and all the
08:56rest of it.
08:57Yes, they could put in managers and God knows what else, but what are you going to do with
09:06everything else?
09:08Do they know and understand what's needed?
09:13You have to get to know the land, to know how to farm it the best, you've got to nurture
09:18it.
09:19You just can't walk in and go, well I'm going to do this, this, this, this, this.
09:24Inheritance tax at all.
09:28Despite the rural community's concerns, the Chancellor says she's committed to supporting
09:32them in passing their land on to the next generation.
09:37This will ensure that we continue to protect small family farms and three quarters, with
09:44three quarters of claims unaffected by these changes.
09:48The government has also announced £5 billion over the next two years, alongside funding
09:54support for those impacted by flooding, but this spending has been questioned by a veteran
09:59Kent MP.
10:01The devastation caused by flooding pales into insignificance compared with the damage that
10:07is going to be done by inheritance tax.
10:09One farmer in my constituency has literally, this weekend, cancelled the building of a
10:13new barn because of it.
10:17The Environment Secretary's response, doubling down on their commitments.
10:22I thank him of course for his intervention, but the vast majority of farmers will not
10:28be affected by changes to inheritance tax, and I would implore him not to underplay the
10:33damage caused by flooding.
10:36Many, many farms were absolutely devastated last year, and it will be immensely welcome
10:40that we've released £60 million now to help farmers deal with that.
10:46Councillor Chandler spends much of her time in Maidstone looking after county council
10:50business, but her family trade is farming, and out on her orchard, she says the problem
10:56is understanding.
10:58I really don't.
10:59I don't think they've done their homework.
11:00I don't think they understand how farming businesses work.
11:03I don't think they understand that in order to be a sustainable farming business these
11:08days, the kind of area you have to farm in order to make an income, and I think that
11:18they've almost set an arbitrary level at which they think they're going to charge the inheritance
11:26tax.
11:27Fees changes might be more than a year away, but farmers say the long-term changes to Kent's
11:32landscape will be irreversible.
11:34Kent's agricultural community has acted quickly on their anger to inheritance tax reforms.
11:40Many headed to London, where they were joined by high-profile speakers from Badenoch to
11:46Clarkson.