The Internet Zero Dying Responsibility: ‘Labour is using inheritance tax to push prime farmland into solar & wind farms and rewilding estates’
https://rationals.substack.com/p/the-net-zero-death-duty?utm_source=substack&utm_medium=email
By THE RATIONALS
On 26 November 2025 Rachel Reeves will deliver her second Budget and decide whether to lock in — or finally soften — the inheritance-tax changes that are already forcing family farms onto the market.
One farmer could not wait to find out what she would do next.
The morning before her first Budget, John Charlesworth, a 78-year-old retired sheep and cattle farmer from Silkstone in South Yorkshire, took his own life. He had spent the preceding months in a state of mounting despair, telling his son Jonathan that the coming changes to agricultural inheritance tax would force the family to sell half the 200-acre farm his father had bought in the 1950s. “The only thing he talked about was inheritance tax,” Jonathan told the coroner. The inquest heard that Mr Charlesworth — a man with no recorded history of mental illness beyond the strain of nursing his late wife — believed suicide was the only way to spare his children a bill they could not pay. The coroner recorded a verdict of suicide and noted that his fears about the coming tax bill had been a significant contributory factor.
One heartbreaking Yorkshire tragedy does not make a policy failure, but it does rather concentrate the mind. From 6 April 2026 the 100 per cent relief from inheritance tax that has allowed family farms to pass from father to son (and, increasingly, to daughter) for the past forty years will be capped at £1 million of combined agricultural and business property value per person — £3 million at the very most for a married couple once the nil-rate bands are thrown in. Above that line the relief collapses to 50 per cent, creating an effective 20 per cent tax on the excess, payable interest-free over ten years.
The Treasury’s case is disarmingly simple. This is a modest tidying-up exercise aimed at wealthy non-farmers who have been buying up land purely to shelter assets from death duties. Only about 520 estates a year will be touched, they say, and most of those belong to the sort of people who already employ clever accountants. The £520 million a year that will eventually flow into the Exchequer will help pay for schools, hospitals, and — not coincidentally — the £5 billion Environmental Land Management budget that is the Government’s flagship contribution to net zero. Fairness, in short, with a dash of greenery on the side.
Thirteen months on, the evidence suggests the Treasury has been engaging in what used to be called, in more robust times, wishful thinking.
Let’s start with the numbers the Treasury prefers not to dwell upon. A perfectly ordinary 350-acre mixed farm in the Midlands or the North is today valued at between £3.5 million and £4.8 million, even though its annual net profit often amounts to no more than £30,000–£60,000. Under the new rules an estate worth £4.8 million faces a tax bill of roughly £760,000 — £76,000 a year for ten years.(Estate value: £4.8 million. First £1 million: 100% relief (tax-free). Excess £3.8 million: 50% relief = £1.9 million taxable value. Taxable at 40% IHT = £760,000 total liability. Over 10 years interest-free = £76,000/year (no other exemptions assumed, e.g., no residence nil-rate band).
Even spread over HMRC’s ten-year instalments, that is more than most cereal or livestock enterprises actually clear. Far from targeting absentee landlords, the policy hits working farmers hardest. CenTax’s analysis, using uprated HMRC and Defra data, found that although non-farming landowners make up 64 % of all farm estates, they account for only 42 % of those that will lose full relief. Dairy units are especially vulnerable, once herds and buildings are included, 87–90 % exceed the £1 million threshold. And as the Institute for Fiscal Studies drily observed, while gifting remains theoretically possible, for farmers over seventy the seven-year rule renders it academic.
The market has not waited for the new law to take effect. In 2024, the year of the announcement, 187,500 acres of farmland were publicly marketed across Great Britain — 19 per cent more than in 2023 and the highest figure Savills has recorded in its present series. In the first half of 2025 another 99,700 acres appeared across Great Britain, 15 per cent below H1 2024 but still 5 per cent above pre-Brexit averages. Savills found that 27 per cent of sales in 2024 were due to debt and financial restructuring, a category that rose amid policy uncertainty. The Office for National Statistics logged 6,365 closures of agricultural, forestry and fishing businesses in the year to June 2025 — the worst annual total on record, coinciding with the post-Budget period