In her recent budget, Chancellor Rachel Reeves has introduced reforms that threaten to reshape Britain’s agricultural sector, impacting everything from family-owned farms to food security. Among the most contentious changes is a tightening of Agricultural Property Relief (APR) and Business Property Relief (BPR), which have been lifelines for families hoping to hand over to the next generation. Many in the sector argue that these adjustments, ostensibly aimed at closing tax loopholes, could devastate the country’s family-owned farms and, by extension, rural communities and the UK’s food security. It may also be somewhat of an own goal for achieving the government’s own environmental targets.
What has Changed in Agricultural Property Relief?
The revisions are designed to raise government revenue but come at a significant cost for the agricultural sector. As of 6 April 2026, a new cap restricts APR and BPR eligibility to a combined £1 million in property value per estate. For farms valued over this threshold, only 50% relief will apply to property value beyond £1 million. In practice, this means a farm valued at £2 million would face a £200,000 inheritance tax (IHT) bill at current rates.
Changes also extend to trusts, increasing IHT charges every ten years and placing new limitations on multiple trusts. For family-owned farms that lack the liquidity to absorb a large IHT bill, the choice will be stark: sell off land, or face financial hardship.
Why is This a Blow to British Farming?
APR has long supported generational continuity in farming, granting substantial tax relief to agricultural properties to ease the financial burden of succession. It’s a measure that has kept family farms intact, contributing to the UK’s food security, local economies, and cultural heritage. The new cap on relief, however, forces the issue of IHT affordability for families with high-value but cash-poor assets.
Estimates suggest that 6,000 family farms may now face an increased inheritance tax burden under Reeves’s changes, potentially putting them on the market.
“These APR changes could disrupt the long-term sustainability of family farms, limiting their ability to plan and invest for future generational transfers.”
Katie Tucker, RPG Executive Director
Faced with mounting IHT bills, many family-run farms may have no choice but to sell portions of their property, thereby diminishing British farming’s small and mid-sized base—a group traditionally considered the backbone of British farming.
The revisions may also restrict tenant farmers, who, despite leasing land, make long-term investments in agricultural assets. With less land passing seamlessly between generations, tenant farmers may have fewer leasing opportunities, further limiting the resilience of the UK’s farming economy.
APR: Disruption to the Rural Economy
Family farms are not just agricultural entities; they are central to the social and economic fabric of rural Britain. They sustain local employment, invigorate supply chains, and invest in regional infrastructure. Land, when passed through generations, ensures continuity in these communities, which are often isolated and dependent on farm-driven economies. The potential loss of 15,000 farming jobs and further impact on the £146 billion agrifood supply chain threatens this stability.
Larger farms or corporations could step in, but the unique role of family farms in rural communities is difficult to replicate. When agricultural assets shift from family ownership to large corporations, the local economy often suffers, and farming communities lose much-needed social cohesion and resilience.
APR and Environmental Sustainability
Farmers typically invest in sustainable practices that benefit future generations when they can pass land down through the family. Long-term land ownership fosters stewardship, encouraging practices such as improving soil health, increasing biodiversity, and implementing eco-friendly agricultural techniques. The APR relief incentivizes these investments, driving progress toward environmental recovery and net-zero goals.
With yesterday’s announcement, however, British farmers are now questioning the future. Some may scale back or abandon environmental investments. This could stall, or even reverse, recent progress in sustainable land management and agritech adoption, damaging both the environment and farming productivity in the long run.
What Does This Mean for Food Security?
The impact of APR changes is not confined to rural Britain alone. These reforms may have a direct effect on the UK’s food security. The more farms that face tax-induced financial stress, the greater the likelihood that agricultural assets will fall into the hands of property developers or large corporations with interests beyond farming. This risks diminishing local food production, weakening the UK’s food security position, and increasing reliance on imports.
A strong agricultural sector is crucial to Britain’s resilience and self-sufficiency, especially amid global supply chain uncertainties. Land near urban areas, once converted to housing or other non-agricultural purposes, will be permanently lost to food production. As Reeves’s budget fundamentally misunderstands ‘wealth’ in the farming context, it encourages the sale of land to cover tax bills. Britain’s capacity to produce its own food could become significantly compromised, leaving the nation vulnerable to external market forces.
The Loss of Family Farms and the Road to Net Zero
Rachel Reeves’ overhaul of Agricultural Property Relief (APR) threatens more than just farmers’ livelihoods; it imperils the UK’s environmental and food security goals. Family farms are uniquely positioned to contribute to sustainability, often leading the way in regenerative practices that protect soil, wetlands, and woodlands—natural carbon sinks crucial to the UK’s net-zero strategy.
Through initiatives like the Environmental Land Management Scheme (ELMS), family farms work to balance productivity with conservation, maintaining hedgerows, planting trees, and fostering biodiversity. If these farms disappear, the UK risks losing these essential contributions.
Larger, profit-driven farms—likely beneficiaries of APR reforms—may prioritize intensive agriculture over these sustainable practices, undermining progress toward the government’s environmental targets. An estimated loss of 6,000 family farms could reduce carbon sequestration, renewable energy output, and sustainable land management, ultimately jeopardizing net-zero ambitions. The UK’s food security is also at stake; once family farms are lost, their specialized contributions to local economies and the environment are not easily replaced.
“If the government aims to uphold its climate commitments and secure food resilience, it should reconsider reforms that risk destabilizing the rural economy. Supporting family farms isn’t merely about heritage—it’s about ensuring that environmental stewardship and local food production remain at the heart of British agriculture”. Mark Lumsdon-Taylor, RPG Chair
A Challenge to the Future of British Agriculture
Chancellor Reeves’s budget has cast a shadow of uncertainty over British farming, with policy shifts that may inadvertently weaken the country’s agricultural landscape. Family farms are at risk of being supplanted by corporate ownership, affecting the local economies they sustain and the food supply chains they underpin. For many, this budget could mark a turning point, one that shifts Britain away from its agricultural roots and makes family farming a relic of the past.
Campainging for a repeal of the changes to APR
Rural Policy Group will be campaigning against the APR reforms on behalf of its members and the wider food industry to protect the future of British farming.