Some respondents said future tax liabilities could force them to sell land or take on additional borrowing
Nearly nine in ten farming and rural family businesses surveyed have frozen investment as inheritance tax changes reshape their plans for the future.
The Country Land and Business Association (CLA), which surveyed 700 rural family businesses, said respondents had cancelled or delayed spending on machinery, diversification projects, reservoirs and other improvements because of concerns over future tax bills.
Of those who had cancelled investment, more than a third said they had shelved projects worth more than £150,000, while 64% had abandoned plans valued at more than £50,000.
Some businesses said they were deliberately limiting investment or allowing assets to deteriorate in an effort to reduce the value of their holdings.
One respondent said: “I am doing everything I can to devalue my business to reduce the tax burden for my children.”
The findings have prompted the CLA to renew calls for changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) to be reversed at this month's autumn budget.
The reforms took effect in April 2026 and mean 100% relief applies to the first £2.5 million of qualifying agricultural and business property, with qualifying assets above that level receiving 50% relief.
The government has argued that the updated allowance means most family businesses will not be affected by the changes. However, almost 85% of businesses questioned by the CLA said they did not believe the £2.5 million allowance would be enough to cover the value of their operation.
Respondents pointed to the combined value of farmland, machinery, livestock, crops and other business assets.
The CLA argues that many rural family businesses are asset-rich but cash-poor, potentially leaving them facing land sales or additional borrowing to meet future inheritance tax liabilities.
Nearly half of respondents said they believed they would have to sell at least a quarter of their land to cover a future bill, while one in four said they could have to sell more than half.
The survey also points to growing concern about the longer-term future of rural family businesses.
Seven in ten respondents said they were worried their business would not survive the next 10 years, while 29% said they were seriously considering leaving the farming industry within the next five years.
Those concerns come as many farm businesses continue to face pressure from weaker incomes and difficult harvests.
The CLA said decisions to hold back investment could also have wider consequences for rural growth, employment and local communities.
CLA president Gavin Lane said the organisation believed the tax changes were forcing some businesses to reduce their ambitions rather than invest for growth.
He said families were “scaling back ambitions, letting buildings deteriorate, and stripping out value”.
The CLA is calling on Prime Minister Andy Burnham and Chancellor John Healey to reverse the reforms at the budget, arguing that the policy risks discouraging investment and expansion across the rural economy.
The government maintains that the changes are intended to raise revenue while continuing to provide substantial inheritance tax relief for farms and family businesses.
The survey nevertheless suggests uncertainty over future liabilities is already influencing investment decisions among the rural businesses questioned.