Farm-friendly fix: Cotswold District Council counters inheritance tax

Council leader Cllr Mike Evemy told the Chancellor of the Exchequer Rachel Reeves in a letter that he understood and supported the government’s intention to ensure a fair and effective tax system. But he said the council was concerned about “unintended consequences” the proposals could have on rural communities in the Cotswolds.  

He added that that the proposals could cause “ruin” for farmers rather than reform, and called for a rethink. 

The letter, which followed an investigation by the council’s cross-party Overview and Scrutiny Committee, outlined alternatives designed to protect family farms, support sustainable land management, and maintain the economic and environmental vitality of farms in Cotswolds and across the UK. 

In the Cotswolds, more than 90 per cent of land is agricultural, with farming supporting four per cent of local jobs - nearly triple the national average. The world-renowned landscape, shaped by generations of farmers, draws 23 million day-visitors and 1.5 million overnight visitors annually, contributing over £1 billion to UK GDP. 

Cllr Jeremy Theyer, ward member for Sandywell and a working farmer, said the reforms could be particularly catastrophic for family farms. “It’s heartbreaking for farmers who have worked their land for generations to think their children might be forced to sell parts of it just to pay a tax bill,” he said.  

“These alternative proposals – especially the idea of exempting farmers who are actively working the land or transitioning to sustainable practices – are the kind of policies that support farming families, along with the future of British agriculture.” 

The council’s proposed alternatives to the existing policy include: 

• waiving IHT for land held in continuous ownership for at least seven years. 

• a “pay if you sell” capital gains model instead of taxing on death. 

• raising IHT thresholds in high-value rural areas like the Cotswolds. 

• exemptions for farmers whose primary income is from farming or who are on recognised sustainability transition pathways, while maintaining the full 40% of IHT on landowners who are not farmers.  

• 100 per cent exemptions for land leased to young tenant farmers to support generational renewal. 

As part of its rigorous investigation over the course of four months, the council’s working group consulted with the National Farmers’ Union (NFU), local land agents, accountants, and farmers. Its findings highlight that the proposed reforms: 

• Fail to reflect the economic realities of farming. 

• Do not allow for sufficient time for effective succession planning 

• Include essential operational assets like livestock and machinery in taxable value. 

• Are already causing investment delays, business closures, and mental health strain. 

• Risk undermining the UK’s climate and biodiversity goals. 

“The alternatives we’ve put forward are not radical – they’re pragmatic,” said Cllr Angus Jenkinson, a member of the working group, who has special responsibility for regenerative agriculture and ecology at the council. “They reflect the real-world economics of farming and the urgent need to support sustainable land stewardship. These are policies that could be implemented quickly and fairly, without compromising the Treasury’s goals.” 

Council leader Cllr Mike Evemy added: “The government’s proposals could force farmers to sell land, abandon sustainable practices, and even close their businesses. That’s not reform – that’s ruin. The government must engage meaningfully with the farming community before it’s too late. We stand ready to work with HM Treasury to shape a fairer, more sustainable future for British farming.” 

Case study: A farmer’s story 

Fred Ackrill (r) with father-in-law Ian Boyd on their farm in Whittington 

Fred Ackrill is married to Steph, who is a fourth-generation farmer at Boyd Farm in Whittington. Steph’s family have been farming the land for more than a century, and she took over the farm from her father Ian Boyd.  

In recent years, the couple have diversified the farm and now have an education centre, cabins for visitors to stay overnight, and even a fashion brand.  

Fred was part of the Council’s consultation and said that while he wasn’t unsympathetic to the concept of the tax, he believed it risked targeting the wrong farmers.  

“As a small working farm, it's really difficult to make things pay,” said Fred. “We've had to go into non farming diversifications - we're really working hard just to make a living and make this a financially viable option for us.” 

He said land prices were artificially high compared to the return that a farm can make, and he feared the taxes would negatively impact small working farms and push them into larger conglomerates. 

“I really worry that this change will squeeze the typical family farm, and will prevent land being taken care of in the way that it always has been,” he added. “It'll force farms to be split up or to or to be sold. 

“What I'd like to see is for the government to have another look at their figures. The inheritance tax limits are now too low that they attack small working family farms rather than just going after these tax loopholes, these larger wealthier individuals or corporations choosing to avoid tax.”