Rural uprising over British tax change that critics say will hammer family farms

LONDON — The countryside came to the capital as thousands of farmers packed into London streets around Britain’s Parliament to protest changes to tax rules.

Some drove tractors, others brought hay bales, many carried signs saying “no farms, no food.” All were protesting against the new Labour government’s decision to tax inherited agricultural property.

“British farmers make less than 1% profit,” Tom Bradshaw, the president of the National Farmers Union (NFU), said in a statement to NBC News shortly after last week’s protests. “They don’t have the money in the bank to pay this proposed family farm tax.”

It was the first major demonstration in London since Prime Minister Keir Starmer’s center-left Labour government took power in July. Rachel Reeves, his finance minister, announced the changes, which are set to come into effect in April 2026, in her annual budget last month.

Similar to estate tax in the U.S., inheritance tax in the U.K. is charged at 40% on the property, possessions and money of someone who has died, above a threshold of 325,000 pounds, or around $410,000. A spousal exemption means married couples and civil partners can pool their allowances to pass on up to $1.2 million to their heirs tax-free.

But under the current rules, land holdings used for crops or rearing animals, plus farm buildings, cottages and houses, have been handed down through the generations without the need to pay the tax, meaning together the total value of a tax-free inheritance could be around $3.77 million.

From April 2026, farms worth more than $1.3 million will face a 20% tax when they are passed on to the next generation, half the usual rate.

Defending the changes, which supporters say will recoup money from wealthy people who have bought up agricultural land as an investment and driven up the cost of farmland, Starmer said at the Group of 20 summit in the Brazilian city of Rio de Janeiro last week that the “vast majority” of farms would be “unaffected” by the taxation changes.

A spokesperson for the U.K.’s Department for Environment, Food & Rural Affairs (Defra) also said in a statement that “around 500 claims of Agricultural and Business Property Relief each year will be impacted,” figures that were “based off actual claims data.”

A separate report published Monday by the Institute for Fiscal Studies, an independent economics research institute, also said that “significantly less than 500 estates per year” will be affected by the changes.

But the NFU, along with the Country Land and Business Association (CLA), a membership organization representing land, property and businesses owners, have estimated that tens of thousands more will be affected.

“Ministers claim the inheritance tax cap hits only the rich, but it could put 70,000 farms — big and small — at risk. All will be questioning their future, and whether they’ll have one to pass on,” CLA President Victoria Vyvyan said in a statement.

Noting the disparity between the government’s figure and its own, on its website the CLA said it was “looking at the impact on farms over a generation, whereas the government’s figure is only looking at a single year. We are not — claiming that 70,000 farms will shut down or have to pay the tax a year.” The website defines a generation as 40 years.

The NFU pointed NBC News to a Nov. 21 report it produced with economists who formerly worked for Britain’s Treasury and Office for Budget Responsibility that says around 75% of commercial family farms would be required to pay the tax.

The protest in London was supported by JCB, which manufactures a wide range of farming equipment and machinery for construction. After giving its employees the day off to join the demonstrations, the company said in a statement that it was “crucial that food from Britain feeds our nation as not all the food we need can come from abroad.”

Despite the gray skies and wet weather, those who did join witnessed scenes similar to those seen in other European cities, where roads have been snarled by farmers protesting a variety of issues including grain prices and European Union farming policies.

But while some of the protests on the continent turned violent, in London the mood was much more jovial as children on toy tractors pedaled around Parliament Square after a rally addressed by speakers including former “Top Gear” TV host and celebrity farmer Jeremy Clarkson.

While some promised to escalate the protests unless the hike is removed, Starmer’s government, which won a large majority in July’s general election, looks set to stand firm.

“Our commitment to our farmers is steadfast — we have committed £5 billion to the farming budget over two years, including more money than ever for sustainable food production,” the Defra spokesperson said.

Environment Minister Steve Reed also told reporters last week that the government was “taking decisions because they’re in the interest of every part of the country.”

“It’s hard to be sorry for trying to make this country’s economy work and our public services work again,” he said.