Norfolk family farms weigh their options after tax bombshell

Chancellor Rachel Reeves sparked fury in her recent budget speech by announcing agricultural property relief (APR) would be cut for farm assets worth over £1m, leaving family businesses facing a crippling 20pc tax bill when handing land down to future generations.

The policy has prompted industry anger, London protests and the launch of the EDP's Fair deal for farmers campaign, all calling for a U-turn on the decision.

Although ministers insist only 27pc of the largest and wealthiest landowners will be affected,  industry analysts say they have "significantly underestimated" the scale of the impact on British farming.

The National Farmers' Union (NFU) has published a detailed impact assessment which concludes that around 75pc of commercial family farms will be above the £1m threshold - claiming the government figures have not taken account of current market conditions, recent record inflation, or the combined impact of claiming Business Property Relief alongside APR.

Separate analysis by the Central Association of Agricultural Valuers (CAAV) suggests up to 75,000 individual farm business owners are "likely to be affected" over a 30-year generation, equating to 2,500 a year - five times higher than the government’s prediction of 500.

Tom Bradshaw, president of the National Farmers' Union (Image: NFU) This week, NFU president Tom Bradshaw put industry concerns directly to the prime minister in a private meeting, after which he said: "I hope we can work together towards a resolution on this issue."

But while waiting for the government's response to the campaigns, lobbying and protests, farm businesses are trying to find their own solutions.

They include one Norfolk family farm which pre-emptively rented out all its land before the general election to "buy some thinking time" on its next steps.

Brothers Bev and Quentin Spratt at their family farm in Tacolneston (Image: Chris Hill) Brothers Bev and Quentin Spratt are the fourth generation of their family to farm in Tacolneston, between Attleborough and Long Stratton. They said they are the last remaining family farm of six which used to operate in the south Norfolk village. 

Bev Spratt said the decision to rent out the farm's 180 acres to tenants was partly driven by uncertainty over the new environmental incentives which are being introduced while EU-era subsidies under the Basic Payment Scheme (BPS) are being phased out. 

But the 79-year-old former county and district councillor said the inheritance tax issue had added further stress to planning the farm's future.

"We could see the Conservative government was going to lose the day, so we decided to get tenants in for a short time to see what kind of different schemes we can go into, he said.

"Hopefully that will be sorted out soon and hopefully the new government will then have an idea of what they are trying to do with Norfolk farms.

"We’ve bought ourselves some thinking time. But all the budget has done is put more stress on small farms.

"We want to hand it over to the next generation of our family. We hope we won’t [sell it], because it is just about viable at the moment.

"Not only that, you will lose the skills of a generation. When you have been walking over the land all your life, you don’t only inherit the money side, which everybody is thinking about, it’s the care of the land, the soil, the hedges, all the rest of it.

"We have always been in front of these things through our entrepreneurial way of doing business.

"But we have always been asset rich and liquid-cash poor, all my life."

Quentin Spratt, 75, said the family business had started diversifying in the 1970s.

"I was in ornamental birds, that was my hobby which I turned into a business," he said. "We saved money, my brother has got an annexe here which he rents out, I’ve got a little barn at home which I rent out.

"As soon as I finished that barn, I paid council tax on it, and I paid tax on the rents straight away, from my savings which I had already paid tax on, and now we have got inheritance tax so when I hand over to my children I will be paying tax again. I will be paying three lots of tax on one lot of money.

"We have been paying tax all our lives, I am nearly 76 and I am still paying tax, and will do until they bury me.

"Our family may have to sell assets to pay this inheritance tax, and that will be it."