Peterborough farmer: ‘Changes to inheritance tax would be pretty terminal for our family farm’

A farmer has said changes to inheritance tax could be “pretty terminal” for his family’s farm near Peterborough.

Tom Martin, farmer and National Farmers’ Union (NFU) member, said his family had been farming in the area for four generations, but shared fears about their future if the tax changes went ahead.

He spoke after Cambridgeshire County Council recently agreed to write to the government to call on it to “stop the Family Farm Tax” in a vote that divided councillors.

Earlier this year in the autumn budget the government announced plans to change inheritance tax, including the reliefs that reduce the amount of tax farmers and landowners have to pay when farmland and business assets are passed on to the next generation.

From April 6, 2026, the full 100 per cent relief from inheritance tax will be restricted to the first £1million of combined agricultural and business property.

Landowners over this amount will pay inheritance tax at a rate of 20 per cent, rather than the standard inheritance tax rate of 40 per cent.

The tax could be paid in instalments over 10 years interest free rather than immediately.

The government claimed that small family farms would still be protected under the changes and that it was only “expected to affect the wealthiest 500 estates each year”.

However, the changes have been branded a ‘Family Farm Tax’, with many people arguing the impact could be much greater, including the NFU which stated it believed around 75 per cent of commercial family farms would be above the £1m threshold.

Mr Martin began working on his family’s farm in Cambridgeshire 10 years ago after leaving a career in the film industry in London.

He said farming was a “massive privilege” adding that he felt like he got to “make a difference all the time”.

However, he said the changes to inheritance tax proposed by the government could be the end of his family’s farm.

He said: “[The changes] will effect us in three ways, one is I suspect – and I do not want to think about my parents dying, but when they do the farm won’t be able to continue, as we do not make enough profit to pay 20 per cent inheritance tax, it is pretty terminal and pretty sad.

“Secondly, we are not investing [in the farm]. We are proud and passionate that we do a lot for the environment – I am currently towards the end of planting 600 fruit trees – we do a lot of things in the local community, but if I invest now in anything, I lose the funds to be able to pay the inheritance tax.

“[Thirdly], it is just constantly having to think about the tax. I want to think about farming, producing food, helping the environment, thinking how to make a difference, but the tax has occupied pretty much every conversation since [it was announced].”

Mr Martin added that on their farm they try and do a lot to help the environment and improve biodiversity, water quality, and soil quality, but said they can only do that if they are “free to do that rather than saddled by an unsustainable tax”.

Councillors divided over call to ask government to ‘stop the Family Farm Tax’

Recently the county council passed a motion calling on the government to “stop the Family Farm Tax”.

However, the motion divided councillors with 16 voting in support, 13 abstaining from voting, and seven voting against it.

Councillor Mark Goldsack (Conservative), who proposed the motion, said many farms were “asset rich in the equipment they need and the buildings that they have and cash poor”.

He said the Chancellor was trying to “tax the rich”, but argued an “awful lot of innocent people, not intended targets are getting hit and they are getting hurt”.

Cllr Goldsack called on the other councillors to show farmers in Cambridgeshire ‘that they care’ by supporting the motion.

Councillor Piers Coutts (Liberal Democrat) said he supported the government’s aims to “reduce tax loopholes”, but said he felt there were unintended consequences.

He said: “My feeling on this measure is that its aims were good, but that it was introduced too quickly and that the detailed effects on our farming community need to be looked at more closely.”

However, Councillor Elisa Meschini (Labour) said the government was trying to “repair the crumbling public realm” after 14 years of austerity.

She said: “I think we have all heard just how unanimous the call for those with the broader shoulders to bear most of the burden.

“Now I have a few questions, who are those with the broadest shoulders? Are they millionaire pensioners, apparently not; are they private schools, apparently not; are they the rich landowners, apparently not; are they employers of large corporations, apparently not either.

“What I want to know is this, as we look for ways to rescue our public realm, where next?”

The motion was ultimately passed when put to a vote.

Mr Martin said he thought it was “courageous and bold” of the county council to pass the motion, as he said it was “really important for the government to hear from all quarters”.

He also invited those councillors who voted against the motion or abstained to visit his farm, or to speak to him and other farmers so they could explain the impact and share information about the work they are trying to do.

He said: “Just come and see and have a conversation, my gate and the gates of many other farmers are open.”