Rural Update: Inheritance tax mental health burden
Your weekly dose of news, views and insight from Knight Frank on the world of farming, food and landownership
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Viewpoint
If you find yourself in an unwelcome hole, the advice is to stop digging. It was extremely uncomfortable, therefore, to watch Defra Minister Steve Reed do the exact opposite when he was questioned at a terse and sometimes emotionally charged session with Parliament’s Labour-dominated Environment, Food and Rural Affairs Committee last week.
Committee members appeared visibly taken aback when Mr Reed claimed that the government’s Inheritance Tax (IHT) raid on family-owned businesses, such as farms, was needed to fund better mental health facilities for the NHS.
It’s widely known that the farming industry suffers from more than its fair share of mental health issues, a point MP Sarah Bool rammed home when she pointed out to Mr Reed that members of her South Northamptonshire constituency had told her some farmers would even consider taking their own lives to avoid burdening their successors with IHT when 100% Agricultural Property Relief is scrapped from April 2026.
As we discuss elsewhere in this update, farming businesses are already facing significant climate change challenges that will test their resilience to the limit. The government has just admitted it went too far when it removed the winter fuel allowance from millions of pensioners, it can do the same with IHT and perhaps start to fill in that hole.
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Commodity markets
Oil edges up
Crude oil prices edged up marginally yesterday (26 May) after US President Donald Trump delayed his recently announced imposition of a 50% tariff on EU imports from 1 June to 9 July. However, predictions that OPEC could decide to increase production when the oil cartel next meets at the beginning of June are keeping a lid on further price rises.
The headline
Trade deal queries
A growing number of concerns are starting to be raised about some of the recent trade deals struck by the government.
Although many of the details are still to be thrashed out, the agreement with the EU that will see an alignment of sanitary and phytosanitary standards (SPS) has come under particular scrutiny.
Food processors and their representatives, such as the British Meat Processors Association, have welcomed the deal, but CLA President Victoria Vyvyan said allowing the European Court of Justice to impose decisions affecting our goods was an unnecessary surrender of control.
“Cutting red tape on food exports and plant and animal health for trade sounds positive if unlikely, but tying us to an agreement that involves European Court of Justice oversight is deeply concerning and could hinder our ability to strike future trade deals with other countries.”
In a post on Substack, economist Catherine McBride claimed the SPS alignment will benefit the EU far more than it helps the UK. “Rather than transferring the UK’s standard-setting to the EU, the UK should add retaliatory tariffs to imported EU goods to counterbalance EU subsidies.”
Ms McBride also claimed the SPS deal could hinder the UK’s adoption of agri-technology and make it more vulnerable to livestock diseases. The government, however, says it remains committed to the adoption of gene-editing technology and that rigorous checks on illegally imported meat would remain in place.
The earlier trade deal struck with the US, which allows two-way tariff-free trade of 13,000 tonnes of beef each year, had initially proved less contentious due to the relatively low volumes involved.
However, the meat industry has now voiced concerns about the impact of US beef exporters targeting premium cuts of meat. National Beef Association Chief Executive Neil Shand said: “Should the US send only fillet steaks, that will unbalance our market.”
News in brief
Family farm tax ire
Defra Minister Steve Reed has been roundly criticised for claiming the controversial family farm tax is needed to help fund mental health services. Mr Reed’s justification came during questioning by the Environment, Food and Rural Affairs (Efra) committee last week.
Campaigners have pointed out that mental health issues are already rising among the farming community, and the changes to Inheritance Tax, which could force producers to sell parts of their businesses to pay Inheritance Tax bills, are likely to exacerbate that.
Dartmoor camping win
Right-to-roam campaigners are already calling for more access to private land after wild camping was ruled legal on Dartmoor following a three-year legal tussle that ended up in the Supreme Court.
Judges unanimously rejected an appeal by landowners Alexander and Diana Darwall, who argued that people should not be able to camp without permission from landowners. There is no general right to wild camp on most private land in England, but Dartmoor National Park in Devon is an exception.
Farmers backed by Gen Z
Coincidentally, not knowing where they are allowed to go is one of the biggest barriers preventing young people from spending more time in the countryside, according to new survey results from Future Countryside.
Almost 60% of respondents cited it as a significant hurdle. Gen Z, however, believes farmers are the ‘best champion’ of the Great British countryside, according to the poll. Farmers scored overwhelmingly higher (32%) than activists and environmental campaigners (12%), as well as politicians (4%).
PepsiCo boosts regen target
The fizzy drinks and snacks giant has just announced it is paring back some of its climate change and environmental commitments, including its recycled packaging and net-zero targets. However, it hopes to boost the area of land in its 60-country agricultural supply chain that is being farmed regeneratively.
PepsiCo’s latest climate transition plan includes a regen goal of 10 million acres of farmland by 2030, up from its previous target of 7 million acres. It claims the move could reduce greenhouse gas emissions by 3 million tonnes by the end of the decade.
EU climate crop losses
Meanwhile, damage caused by drought, hail, flooding and other malign weather could cost the EU’s farmers over €40 billion a year by 2050 if climatic trends continue, according to a new report from the European Investment Bank.
Bad weather is already causing average annual losses of €28 billion, with crop yields down by over 6%.
Fires ravage rainforests
Worryingly, global deforestation also hit a new high last year with nearly 7 million hectares of tropical forest destroyed, according to the World Resources Institute. That equates to the equivalent of 18 football fields per minute.
Fires overtook agriculture as the biggest culprit, burning five times as much forest in 2024 as in 2023. However, primary forest loss unrelated to fires also increased by 14% over the same period, mostly driven by the conversion of forests to agriculture.
Bluetongue restrictions lifted
Better news for livestock producers: the bluetongue virus restricted zone will be extended from 1 July 2025 to cover the whole of England.
This will effectively end movement restrictions, allowing farmers to move cattle and sheep throughout England without movement tests. The decision recognises that the area of England where bluetongue has been found is now too large for movement restrictions to remain an effective and proportionate way of controlling the disease.
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Property of the week
Cheshire arable unit
This week we’re taking a trip to Cheshire to visit Lower Moss Farm at Malpas.
On the market for the first time since being bought from the Cholmondeley Estate in 1924, the 240-acre arable unit includes an attractive Grade II listed farmhouse and a range of traditional and modern farm buildings. The guide price is £4 million.
Please get in touch with Will Oakes for more information.
Discover more farms and estates on the market with Knight Frank.
Property markets
Development land Q1 2025 - Market falls
The value of greenfield development land fell by 2% in the first quarter of the year. Urban brownfield sites, however, lost 5% of their value over the same period, according to the Knight Frank Residential Development Index.
Farmland Q1 2025 - Values resilient
The Knight Frank Farmland Index, which tracks the average price of bare agricultural land across England and Wales, showed a marginal drop of 1% in the first quarter of 2025 to £9,072/acre. This follows a similar small decline in the final three months of 2024, bringing the annual fall to just 1.9%.
Country houses Q1 2025 - Mixed picture
The average price of desirable homes in the countryside slipped by just 0.3% in the first quarter of the year, according to the Knight Frank Prime County House Index. Over the past 12 months, values have fallen by 1.6%.