Cotswold District Council urge government to rethink inheritance tax
The council say it risks being catastrophic for farms in the region
Cotswold District Council has warned the Government its inheritance tax (IHT) proposals risk being catastrophic for farms in the region and urged it to adopt farmer backed alternatives.
Council leader Cllr Mike Evemy told the Chancellor of the Exchequer Rachel Reeves in a letter that he understood and supported the government’s intention to ensure a fair and effective tax system.
But he said the council was concerned about “unintended consequences” the proposals could have on rural communities in the Cotswolds.
He added that that the proposals could cause “ruin” for farmers rather than reform and called for a rethink.
The letter, which followed an investigation by the council’s cross-party Overview and Scrutiny Committee, outlined alternatives designed to protect family farms, support sustainable land management, and maintain the economic and environmental vitality of farms in Cotswolds and across the UK.
In the Cotswolds, more than 90 per cent of land is agricultural, with farming supporting four per cent of local jobs - nearly triple the national average.
The world-renowned landscape, shaped by generations of farmers, draws 23 million day-visitors and 1.5 million overnight visitors annually, contributing over £1 billion to UK GDP.
Cllr Jeremy Theyer, ward member for Sandywell and a working farmer, said the reforms could be particularly catastrophic for family farms.
“It’s heartbreaking for farmers who have worked their land for generations to think their children might be forced to sell parts of it just to pay a tax bill,” he said.
“These alternative proposals – especially the idea of exempting farmers who are actively working the land or transitioning to sustainable practices – are the kind of policies that support farming families, along with the future of British agriculture.”
The council’s proposed alternatives to the existing policy include:
waiving IHT for land held in continuous ownership for at least seven years.
a “pay if you sell” capital gains model instead of taxing on death.
raising IHT thresholds in high-value rural areas like the Cotswolds.
exemptions for farmers whose primary income is from farming or who are on recognised sustainability transition pathways, while maintaining the full 40% of IHT on landowners who are not farmers.
100 per cent exemptions for land leased to young tenant farmers to support generational renewal.
As part of its rigorous investigation over the course of four months, the council’s working group consulted with the National Farmers’ Union (NFU), local land agents, accountants, and farmers. Its findings highlight that the proposed reforms:
Fail to reflect the economic realities of farming.
Do not allow for sufficient time for effective succession planning
Include essential operational assets like livestock and machinery in taxable value.
Are already causing investment delays, business closures, and mental health strain.
Risk undermining the UK’s climate and biodiversity goals.
Council leader Cllr Mike Evemy added: “The government’s proposals could force farmers to sell land, abandon sustainable practices, and even close their businesses.
“That’s not reform – that’s ruin.
“The government must engage meaningfully with the farming community before it’s too late.
“We stand ready to work with HM Treasury to shape a fairer, more sustainable future for British farming.”
The government have previously said:
“The government is committed to supporting farmers and rural communities, including helping families to pass their land on to the next generation.”