It could have been better designed, but Rachel Reeves’s inheritance tweak will help farmers with mud on their boots

Should multimillionaire landowners benefit from a tax break designed to help small family farms pass down their land to their children? This is a hotly contested question, given last week’s budget. Labour has reintroduced 20% inheritance tax for farms that are valued at more than £1m, meaning the children of farmers will no longer inherit land tax-free. Granted, 20% is still only half of the standard inheritance tax rate, and it probably sounds more than generous to an ex-miner, foundry worker or shipbuilder. But today, £1m would only buy you about 40 hectares (100 acres) of farmland, which is far short of a viable farm.

Farming is a long-term business that requires substantial assets and often makes only meagre returns. Farming families have not had to consider tax planning for family succession since 1992. As a second-generation farmer, I support much of the budget. But on the inheritance tax threshold, I thought, the chancellor, Rachel Reeves, had got it wrong. The positive reading of her decision is that she was trying to close a loophole whereby wealthy people buy up farmland and pass it, tax-free, to their children. If that was the main objective, though, the threshold should have been set substantially higher than £1m.

Guy Singh-Watson is the founder of the organic veg box company Riverford and a member of Patriotic Millionaires UK. He grows organic vegetables on 60 hectares (150 acres) in Devon and 120 hectares (300 acres) in the French Vendée. He sold Riverford in 2018 to its 1,000 employees, and the company is now 100% employee-owned