NFU Scotland has renewed its opposition to proposed UK Government changes to Inheritance Tax, warning that reforms due to take effect in April 2026 could put the future of thousands of family farms at risk across Scotland.
The union says planned changes to Agricultural Property Relief and Business Property Relief, including a £1 million cap, remain deeply flawed and unworkable despite months of lobbying by farming organisations.
NFU Scotland is calling on MPs to support urgent amendments to the Finance Bill, with particular focus on removing what it describes as a cruel and unworkable anti forestalling clause.
The clause would mean that farmers who transfer assets before April 2026 could face both Capital Gains Tax and Inheritance Tax if they die within seven years.
The union argues this would punish responsible succession planning and leave elderly and terminally ill farmers facing impossible choices.
NFU Scotland says that with less than four months until the cap is introduced, many long established family farms remain exposed to tax bills that could force the sale or break up of viable businesses.
Alongside scrapping the anti forestalling clause, the union is pressing for a significant increase to the proposed £1 million cap, in line with independent advice from tax specialists CenTax.
NFU Scotland President Andrew Connon has made repeated visits to Westminster to lobby MPs and raise awareness of the real world impact of the proposals.
Andrew Connon, NFU Scotland President, said:
“This clause is a moral and political failure.
“Elderly and terminally ill farmers are reporting that they are in an appalling situation, where they are financially better off dying before April 2026 than transferring the farm to the next generation.
“No tax policy should ever punish people for doing the right thing.
He added:
“We’ve had a minor tweak made to spousal transfer in the recent budget, but for most farming families, this is still a ticking time bomb.
“We won’t stop fighting until this clause is scrapped and fair, workable reforms are delivered.”
NFU Scotland says the scale of the problem is being badly underestimated by the UK Government.
While HMRC suggests only a few hundred farms will be affected, CenTax estimates that up to 75,000 UK farm businesses could be exposed to the changes.
The union has highlighted real case studies to illustrate the potential damage.
In one example, a typical mixed dairy, sheep and arable family farm would see an Inheritance Tax bill rise from £20,000 under current rules to £775,000 under the proposed cap.
The farm’s average five year profit is £40,000 split three ways, leaving the family nowhere near able to service repayments of around £70,000 per year.
NFU Scotland argues that such liabilities are unpayable and would inevitably lead to farms being broken up or sold.
The union is urging all Scottish MPs to support amendments removing the anti forestalling clause, calling on the UK Government to honour its promise to protect agricultural reliefs.
Farmers and crofters are also being encouraged to continue contacting MPs and sharing their stories.
Andrew Connon concluded:
“This is not about tax avoidance, it’s about protecting the future of real working farms.
“The changes coming in April are a gift to non farming investors and a blow to the backbone of rural Scotland.
“We will not let this stand.”
