Labour's tax raid on farms 'could turn them into net zero forests'

Labour's plan to force farmers to pay inheritance tax on agricultural land could see it taken out of food production by foreign firms who use it for carbon offsetting, a leading landowners organisation has claimed. 

The head of the Country and Land Business Association warned that tracts of productive soil could also be bought up by environmental charities for 'biodiversity projects' that generate no IHT for the Treasury.

The CLA's president, Victoria Vyvyan also warned that it could also leave areas open to development for housing.

It comes as farmers gear up for a major protest against the Budget changes that will see IHT charged at 20 per cent on agricultural assets above £1 million. Chancellor Rachel Reeves has said that in some cases the threshold could in practice be about £3 million.

While the 20 per cent figure is just half the standard rate, farming unions and opposition parties have criticised the move, arguing that it will make British farms uncompetitive.

Ms Vyvyan, whose family has owned the 1,000-acre Trelowarren estate in west Cornwall for 600 years, told the Telegraph: 'If family farms are forced to sell, the land won't just go to neighbours. Buyers may include corporations needing carbon offsets, local councils eyeing development, and lifestyle buyers.

'Environmental charities may also step in, using the land for ecosystem services, biodiversity projects, and new habitats. Unlike farmers, they'll face no inheritance tax.

'We know from experience that all these options can lead to responsible land stewardship. But each risks breaking the vital link between the land and those who know it best – those who live and work on it every day.'

Last night Kemi Badenoch blasted the 'cruel family farms tax' as she demanded Sir Keir Starmer ditch changes to inheritance rules.

During her first appearance at PMQs as Tory leader, Ms Badenoch pledged to reverse the controversial Budget measures if her party returned to power.

Speaking in the House of Commons, Ms Badenoch asked for the Government to 'reassure' farmers who are worried about the move.

'What does he say to farmers who are facing uncertainty about their futures as a result of the increased taxes announced by the Chancellor?,' she asked the PM.

About 50 farmers gathered outside the Northern Farming Conference in Hexham, Northumberland, yesterday, where speakers were due to include Environment Minister Daniel Zeichner.

One farmer said he was worried about 'getting to the next harvest' after cuts to delinked payments, while another said his inheritance tax bill would be pushed 'to an almighty level' with 'massive repercussions for the next generation'.