Sunir and Natalie's comments were published in FT Adviser, 12 August 2026, and can be seen here.
Sunir Watts, Partner, and Natalie Spong, Associate, in our Private Client department, examine the mounting pressures facing British family farms, as rising operating costs, declining incomes and changes to inheritance tax reliefs place increasing strain on the agricultural sector. The number of farms in Britain has fallen significantly over the past two decades, with smaller family-run operations particularly vulnerable.
Currently, farmers are being squeezed from both sides. Production costs, including feed, fuel and fertiliser, continue to rise sharply, while agricultural output prices have fallen. Dairy, beef and pork producers have all seen reduced returns, while arable farmers are also grappling with lower yields and the growing impact of extreme weather events linked to climate change.
Post-Brexit reforms have added further challenges. The replacement of direct subsidy payments with Environmental Land Management schemes has altered the financial landscape for many farms, with some environmentally focused incentives proving less profitable than previous support arrangements.
Since April 2026, full Agricultural Property Relief (APR) and Business Property Relief (BPR) have been capped, creating new succession planning considerations for landowners. While opportunities remain for married couples and civil partners to maximise available reliefs, families are increasingly reviewing their structures and long-term plans in light of the new rules.
Looking ahead, it's suggested that the combination of lower profitability and reduced tax advantages is likely to drive further farm sales, particularly among smaller holdings. With more farms coming to market and confidence across the sector at low levels, the long-term sustainability of many family farming businesses remains uncertain.
Read the full article on the FT Adviser website [external link].