NFU Cymru has warned that the UK government’s controversial inheritance tax reforms will hit not just farmers but the wider rural economy, with local businesses braced for a severe downturn in confidence and reinvestment.
The union used the Pembrokeshire County Show in Haverfordwest to underline the dangers of proposed changes to agricultural property relief (APR).
While the measures are designed to clamp down on land purchases made purely for tax advantages, NFU Cymru argues that small family farms will become “collateral damage”, with communities across Wales paying the price.
The union's deputy president Abi Reader said the policy would punish those least able to cope.
One of the farmers sharing her story was 71-year-old Janet Cornock from Fishguard, who ran a thriving dairy herd with her husband Gwilym until his death in 2018.
She now manages the farm with her son James and his family, but she had always hoped her grandchildren would continue the business. That future is now in doubt.
“Gwilym and I worked hard all our lives and the farm has meant everything to us," Janet said, "We rarely holidayed and rather than spending money on ourselves, we would reinvest it in the business for the children’s future, to pass it on to them.
“We have always been careful with our finances and we’ve paid a significant amount of tax each year on our earnings, as you would expect.
"But I am so scared about the idea of the family farm tax and what it will do to the farm – I lie awake at night and my heart is pounding.”
Janet said that in just three months the farm had spent money with over 40 local firms, warning that new tax liabilities would “kill reinvestment” and choke off income for the rural supply chain.
Responding, Abi Reader accused ministers of pressing ahead with a “tax raid” that would leave small farms unviable.
“Farmers are in despair that the UK government is pushing on with its devastating tax raid on small family farms that have, over generations, been the cultural lifeblood of their local communities, driven the local economy and put food on people’s tables.
"What makes me especially angry is that this flawed policy is going to harm the elderly, the infirm and those who have suffered personal tragedy – many of whom are unable to get their complicated tax affairs in order to meet a bill they could not have planned for.”
Ms Reader stressed that farms do not operate like ordinary businesses, with most wealth tied up in land and buildings rather than liquid cash.
As a result, many would be forced to sell assets to cover the bill – undermining the long-term viability of the farm itself.
“We acknowledge government’s desire to bear down on the practice of purchasing agricultural land as a tax efficient investment by individuals who have no intention of farming the land.
"However, we have evidenced to government time and again that this ill-thought-out policy will see small family farms become the collateral damage for a policy that returns a negligible amount to the public purse.
"The fears of thousands of families have not been adequately addressed by government and that, to me, is unacceptable."
