UK Government urged not to put Scotland’s rural economy at risk through inheritance tax changes

Press Release

An opportunity exists for the UK Government to change course on its illogical changes to inheritance tax for farms - but it needs a willingness by government to work with the sector.

Scottish Land & Estates (SLE), the rural business organisation, made the comments as a Westminster Hall debate takes place after a petition against the changes reached almost 150,000 signatures.

Warning that the planned reforms will place an unmanageable tax burden on Scottish farmers, threatening the future viability of family-run farms and the broader rural economy, SLE urged the government to engage constructively – something it had failed to do so far.

Eleanor Kay, Senior Policy Adviser – Agriculture & Climate Change at Scottish Land & Estates, said:

“The UK Government’s decision to reform APR and BPR without a thorough consultation with the farming sector is extremely unhelpful and short-sighted. 

“The notion that these changes will only impact the wealthiest estates is entirely misleading. Family-run farms, which operate on tight margins and rely on their land as their primary business asset, will face enormous financial pressure under these new rules. 

“We are calling on the UK Government to engage directly with the agricultural sector to understand the real-world implications of these reforms. It is unacceptable to the industry that no discussions were held with the Scottish Government or industry representatives before these announcements were made. The lack of communication has only deepened the sense of frustration and distrust among farmers.”

SLE emphasised that the changes would not only affect current farm owners but also pose serious challenges for future generations looking to enter the industry. The impact on Business Property Relief will also be felt by a wide range of family businesses, not just those in agriculture. 

Eleanor continued: “The Prime Minister has been clear that food security is national security. However, his government’s decisions now threaten our farmers’ ability to deliver on this national priority, making it significantly harder for young farmers to take over family farms and forcing many to sell off land just to cover inheritance tax bills. 

“This will have lasting consequences for Scotland and the UK’s food production, local employment, and the sustainability of rural communities.

“The major taxation change comes in alongside other tax increases, such as employers' national insurance and the taxation of double cab pickups, all of which serve to make the cost of doing business in rural areas even higher.”

SLE is urging the UK Government to rethink its policy and work collaboratively with the agricultural industry to develop solutions that protect both fiscal interests and the long-term future of British farming.

Ms Kay concluded: “The farming sector is already under immense pressure from rising costs, climate challenges, and market volatility. At a time when we should be supporting farmers to invest in innovation and efficiency, these tax changes will do the exact opposite—discouraging investment and driving many farms into financial instability.

“There are alternative ways to reform APR and BPR that do not disproportionately punish hardworking farming families. We strongly urge the government to extend its consultation process and explore fairer, more sustainable approaches that do not put the future of Scotland’s rural economy at risk.”