More than a third of UK farms at risk of bankruptcy by 2030 due to inheritance tax changes

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The research, commissioned by financial consultancy Ashbridge Partners, looked at the impact of the government’s controversial inheritance tax proposals. Changes to the Agricultural Property Tax (APR) from April 2026 will see the current 100% exemption only apply to the first £1m of agricultural and business property. Any inheritance above that amount will be subject to a 20% tax, which can be paid in interest-free instalments over 10 years. A married couple can inherit up to £3m tax-free. The research found that more than 10% of farmers could face an inheritance tax bill of more than £1m, while 31% are expected to pay more than £500,000 in tax. The average annual income of a UK farm was £86,000 in 2022/23, with 17% of farms making a loss during that period. Ashbridge Partners calculated that it would take the heirs of an average farm 11-12 years to pay off a £1m tax bill, exceeding the government’s 10-year repayment timeframe.

60% of farmers surveyed say their farms could become financially unsustainable if the government goes ahead with the proposed changes

41% of farmers see the need to sell at least half of their holdings and 39% say they will be forced to sell farmland. More than half of those surveyed fear their farms will be bought by domestic and international companies or “tycoons”, threatening the ownership of traditional British farmers. Previous industry reports have pointed to similar trends: in the past 12 months, more than half of all farmland in England has been bought by private and institutional investors and “lifestyle” farmers, while traditional farmers accounted for just 47% of all purchases. Mark Ashbridge, chief executive of Ashbridge Partners, said the government’s proposed changes could have a serious impact on farming families and businesses. “With more than half of UK farms at risk in the next 10 years, these policies are simply not sustainable for the majority of farmers. If these proposals are implemented, many farmers will be forced to take out loans or find other ways to cover the extra costs.”

The research found that 17% of farmers will be forced to sell buildings, 7% could also sell their farm machinery and 4% plan to sell other property

A further 27% will be forced to liquidate shares and future investments. Almost one in ten farmers could be forced to sell their farmhouse and 23% said their farm shop could be at risk, leading to the closure or change of ownership of more than 360 shops. Responding to the findings, British farmer Olly Harrison said: “The number one priority for any politician should be to feed the nation. The government’s ignorance of the fact that British farmers feed the country three times a day is appalling. These are scary times, not just for farmers but for everyone.”

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