Thousands of farms across Yorkshire could be hit by Labour's 'tractor tax'
The party has called on Labour to scrap the so-called “tractor tax”, after the National Farmers’ Union warned that the reforms could force farmers to sell their family farms.
Rachel Reeves has faced a backlash after using her first Budget to propose changing agricultural property relief (APR) and business property relief (BPR) from April 2026 in a bid to raise more funds for public services.
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Hide AdThe first £1 million of combined business and agricultural assets will continue to attract no inheritance tax.
But for assets over £1 million, inheritance tax will apply with 50 per cent relief, at an effective rate of 20 per cent.


Ms Reeves said that couples will be able to use their own separate inheritance tax allowance on top of this, explaining that “you can pass on without paying any tax, for most cases, a farm worth £3 million”.
She said that “only a very small number of agricultural properties” will be affected, with the government estimating that only 27 per cent of farms will be impacted.
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Hide AdThe Liberal Democrats have calculated how many farms this makes up in every constituency.
Across Yorkshire and the Humber, 3,269 farms are set to be affected if the Government’s analysis proves correct.
Conservative seats are to be impacted the most, with Sir Julian Smith’s Skipton and Ripon constituency with 457 farms which could be pulled into paying inheritance tax when passing on their estate.
Kevin Hollinrake’s Thirsk and Malton seat has 446 farms who may now be liable for a tax bill on death.
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Hide AdThe Labour constituency with the highest number of farms likely to be affected by the reforms is Scarborough and Whitby with 164.
After the Budget, the new MP Alison Hume told this paper that “we’re trying to protect your proper family farm, that has been in the family for generations, but to do something about the large numbers of people who buy huge swathes of farmland to avoid paying their taxes”.
Yesterday, the Chancellor was played a clip of Rebecca Wilson, a fifth-generation farmer from Yorkshire, who raised concerns about the changes.
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Hide AdMs Wilson, appearing on the BBC’s Sunday With Laura Kuenssberg programme, said: “On paper our farm is a valuable asset. But farmers like us often work very hard for very low returns and we rarely have surplus cash in the bank.
“Even using personal allowances, the Chancellor’s proposal could hit us with a tax bill of nearly £1 million when my parents die.
“How is the Chancellor going to ensure that my generation will keep on farming in light of the changes announced in the Budget?”
Ms Reeves responded: “I hope that Rebecca and her family will look through the details because, if the farm is owned by two people, you have £3 million essentially tax-free and then the tax rate is a 50 per cent discount on everyone else and you would have 10 years to pay it.”
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