A Cumbrian hill farmer has spoken of the profound relief she felt after a surprise government announcement on inheritance tax effectively secured the future of her family's land and livelihood.
A Terrifying Tax Bill Threatens Generations of Work
Just before Christmas, the farmer attended a conference near Penrith where an accountant laid out the stark reality of inheritance tax rules for agricultural land. Using a model of a typical hill farm like her own in Tebay, Cumbria, the calculation revealed a potential bill of £59,000 every year for ten years.
"This terrified me," she admitted. Between the farm's modest income and off-farm jobs, generating that level of profit was impossible. The family sought legal advice, facing an uncertain future where keeping their land seemed financially untenable.
A Lifeline Announcement Days Before Christmas
However, on 23 December, the government delivered an unexpected reprieve. The threshold for land and assets subject to inheritance tax was raised from £1 million to £2.5 million. For this farmer, walking up the fellside as her phone buzzed with the news, it felt as if "the future had suddenly opened up again after being under a huge cloud."
"I feel I can breathe again," she said, describing the immense psychological weight that had been lifted. The change means her family can now realistically plan to pass the farm to the next generation.
Why Small Hill Farms Are Vital Yet Vulnerable
The farmer highlighted the critical yet precarious position of small hill farms in areas like Cumbria. These businesses are vital to local communities and landscape management but often operate on slim margins. Their properties, however, are highly desirable for non-agricultural purposes.
Farmhouses are frequently valued at high prices for their commercial potential as holiday lets or "party houses," not for farming. She cited a nearby example: the farm across the river, which was nearly turned into a safari park, is now holiday cottages listed for sale at £2.35 million.
"Our farm could have had a similar fate," she noted. Her family actively works to restore wildlife habitats and increase biodiversity, with three generations living on and caring for the land. The old £1 million threshold would have ensnared farms like hers, potentially driving them out of business and into the hands of new owners with "very different priorities and no connection to the community or rural life."
Public Money for Public Goods
While acknowledging wider issues in farming finances and the need to ensure government support reaches those who actively contribute, the farmer made a clear case for her family's work. "We do contribute, and we need help to survive – public money for public goods," she stated.
Concluding on a personal note, she described the bitter cold of the day and her next task: checking on the sheep. "Thank goodness I can go about it without feeling dread for the future," she said, a simple statement underscoring the profound impact of the policy change on the ground.
