Dorset farmers warn new inheritance tax could end family farms
Dozens of Labour MPs have abstained in a vote on proposed inheritance tax changes for family farms
More than 30 Labour MPs have defied their party leadership by abstaining on a controversial vote to impose inheritance tax on family farms.
Under the government’s plans, inherited agricultural assets worth more than £1m would be taxed at 20%, reversing a relief that has existed in its modern form since the 1980s.
The Treasury estimates the change will raise £520m a year by 2029.
But some MPs and most farmers warn the measure risks dismantling the family farm model.
The proposal was approved in the Commons by 327 votes to 182, yet 84 Labour MPs did not take part, exposing fractures within the governing party.
In Dorset, farmer James Bowditch described the proposal as potentially devastating. “It means an awful lot of inheritance tax will swallow up all our profit,” he said. “We won’t be able to invest in the future of our farm and it will stop us from putting bread on the table for our family.
“If they had any inclination of what level a farm has to operate to be financially viable, £3m doesn’t even cut it. They’re changing the goalposts far too late for people in their seventies, eighties and nineties.”
The National Farmers’ Union president, Tom Bradshaw, praised Labour MPs who broke ranks: “They represent the working people of the countryside and have spoken up on behalf of their constituents.
“It is vital that the Chancellor and Prime Minister listen to the clear message they have delivered.”
Farmers have proposed an alternative “clawback” model, where tax would only be paid if the land is later sold, rather than when it is inherited. “That’s how the rest of Europe does it,” Mr Bowditch said. “The person continuing to farm is not the person to go after.”
Two MPs warned the party risks losing farmers’ trust, arguing that most are “not wealthy land barons” but businesses operating on narrow or non-existent margins.
For many in rural Dorset and beyond, the fear is not just about tax, but about the future of food production itself.
Mr Bowditch warned: “Once the skills have gone from the land, they’ll be gone for good and rich people will take over, take the grants and produce nothing.”