Good news about the Family Farm Tax

Farmers have been complaining for some time that the price of farmland has lost any connection with the income that be derived from farming it. And The Agri Brigade column in the new Private Eye suggests they have a strong case:

Average UK farmland prices have more than quadrupled this century, from just under £2,000 an acre to well over £8,000 an acre, according to statistics from land agents Savills. 

Over that time, farm profitability has remained poor, but farmland's IHT-free status drew many ultra-high-net-worth individuals into buying land as a convenient way of minimising their tax liabilities – the so-called "Jeremy Clarkson effect". 

By doing so, these buyers pushed up the price of farmland way beyond what many ordinary farmers can afford to pay for it (UK farmland prices are four times higher than those in France, for example).

For this reason, I argued back in January that it was the lack of inheritance tax on farmland that had caused causing farmers' problems.

But now, from the same Eye column, comes good news:

Evidence is emerging that the controversial withdrawal of 100 per cent Inheritance tax [IHT] relief on farmland is having the intended effects of cooling a previously overheated market and deterring those who are more interested in minimising their tax bill than producing food. ...

In 2025, the proportion of farmland bought by what Strutt & Parker describes as "lifestyle buyers" fell to 11 per cent down from 16 per cent the year before. At the same time, the proportion of farms bought by farmers rose to a seven-year high of 59 per cent. 

During 2025, the Knight Frank Farmland Index showed that bare agricultural land sold in England and Wales fell by an average of 5 per cent, the first time since 2017 that prices had fallen this much over a 12 month period.

The Eye speculates that, because they tend to represent the interests of their wealthier members, the National Farmers Union and the Country Land and Business Association (formerly the Country Landowners Association) will continue to campaign against inheritance tax on farmland.

But I hope we Liberal Democrats will quietly drop our campaign against what, strangely, we called the "Family Farm Tax".