Inheritance Tax Will Be ‘Death Knell’ for Many Farms in Northern Ireland, Lords Hear

Members of the Ulster Farmers' Union take part in a protest as part of the National Farmers' Day of Unity, a day of action across Britain organised by the NFU and other farming unions in Londonderry, Northern Ireland, on Jan. 25, 2025. Steven McAuley/McAuley Multimedia/PA Wire

Inheritance tax reforms will disproportionately impact Northern Ireland’s agricultural communities and be the “death knell for many farming families,” the House of Lords has heard.

Lord Maurice Morrow told colleagues in the Lords on Monday that the changes will worsen the situation for Northern Ireland’s agricultural community, which has already faced rising prices amid higher costs of living and the “chokehold” of the post-Brexit Windsor Framework, which he said are subjecting farmers to “onerous regulations and red tape.”

Morrow, a Democratic Unionist Party (DUP) peer, said that the plans put forward by Chancellor of the Exchequer Rachel Reeves to introduce a 20 percent inheritance tax on farms worth over £1 million would “disproportionately hit” his country, because “an acre of ground is much more expensive in Northern Ireland than in any other region of the United Kingdom.”

A paper published by the House of Lords Library on Jan. 17, showed that while the average farm size in Northern Ireland is 40 hectares, it has the highest average land value among the UK’s 11 nations and regions, at £34,085 per hectare of pasture–arable land.

“These inheritance tax reforms compound a serious negligence of the agricultural community, as family members who have worked on farms all their lives will be forced to sell land and assets to cover the bill of a parent’s death,” the Northern Ireland peer said.

‘Culling’ Lines of Succession

Morrow’s warnings echo those of other farmers, lawmakers, and campaigners who said that the changes will leave the children of farmers struggling to pay the death duty, forcing some to sell parts—if not all—of their land.

Fellow DUP peer Lord Robert McCrea of Magherafelt and Cookstown said the measures “will ensure that innumerable farms across Northern Ireland have their line of succession culled.”

“Families will struggle to foot the bill after a parent’s death, meaning that family members who have worked on farms for decades will instead be forced to split or sell off assets,” McCrea said.

The government has continued to defend the changes, saying the tax was needed to fill the “£22 billion black hole” left in the public finances by the previous Conservative administration.

It has said the tax would only affect a small number of wealthy landowners who are not farmers, but who have been using Agricultural Property Relief to avoid paying inheritance tax, and that there are mechanisms in place to support farmers.

Previous System ‘Skewed’

Closing the debate in the Lords, Financial Secretary to the Treasury Lord Spencer Livermore reiterated the government’s stance that only a small number of farming estates—up to 520 across the UK in 2026/2027—will be affected.

Livermore said that when the previous system of 100 percent relief on business and agriculture assets was introduced in 1992, it was “heavily skewed towards the wealthiest landowners and business owners.”

He said under the new system, 100 percent relief will be in place for the first £1 million, with an effective reduced rate of 20 percent for amounts over that, rather than the standard 40 percent inheritance tax rate.

All estates making claims for reliefs “will continue to receive generous support, at a cost of £1.1 billion to the Exchequer in the first year,” Livermore said.

Members of the Ulster Farmers' Union take part in a protest on the streets of Londonderry, Northern Ireland, on Jan. 25, 2025. Steven McAuley/McAuley Multimedia/PA Wire

“The reliefs also sit on top of other spousal exemption and nil-rate bands which exist. Therefore, a couple with agricultural or business assets will typically be able to pass on up to £3 million of assets without any inheritance tax having to be paid,” the minister said.

Supermarkets Back Farmers

The debate followed protests across the six counties of Northern Ireland on Saturday, where farmers took part in tractor rallies to demonstrate support for the National Farmers’ Union’s (NFU) Stop the Family Farm Tax campaign.

Similar protests took place across the rest of the UK, marking a joint union effort between the Ulster Farmers’ Union (UFU), NFU, NFU Scotland, and NFU Cymru in Wales.

Ahead of the event, UFU President William Irvine said the unions wanted to make the issue “front and centre” in the lead-up to the government’s spring statement in March.

“Farmers are the backbone of this nation, and we will not be silenced,” Irvine said.

Members of the Ulster Farmers' Union take part in a protest on the streets of Londonderry, Northern Ireland, on Jan. 25, 2025. Steven McAuley/McAuley Multimedia/PA Wire

In recent weeks, the issue has also garnered support from some of Britain’s biggest supermarkets, including Tesco, Morrisons, and Asda.

In a video message posted to social media platform X on Jan. 11, head of agriculture at Morrisons, Sophie Throup, said, “We understand your anger and your frustrations at the inheritance tax, and we’re with you.”

Throup said that the supermarket shared farmers’ concerns and that Morrisons has been raising these issues “at the highest levels of government since November last year and we will continue to do so.”