Almost half of South Devon’s farmers will face an inheritance tax bill of at least £300,000 when new rules on agricultural assets come into effect next year, according to South Devon MP Caroline Voaden.

From April 2026, a single farm owner with inherited agricultural assets worth more than £1m will face a 20 per cent tax bill - half the normal rate.

Known as the ‘tractor tax’, it was announced in last year’s autumn budget by chancellor Rachel Reeves, sparking widespread anger among farmers. Critics have also warned that the policy will have an impact on the UK’s food security.

The issue has become a major headache for the government, and earlier this week (February 10) farmers staged a massive protest outside the Houses of Parliament by blocking Westminster with hundreds of tractors.

The government has countered by pointing out that there are spousal exemptions and nil-rate bands (married couples or those in a civil partnership with farms worth £3m are exempt, for instance).

It has also insisted that only about a quarter of the country’s farms – about 500 – will be affected by the new tax.

However, the Country Land and Business Association (CLA) has rejected the government’s claims, saying the tax will affect a third of all farms (70,000) over future years.

To determine the extent of the problem, Ms Voaden sent out a survey to “every farmer” in her South Devon constituency, with the results showing that 85 per cent of them believe they will be impacted by the tax.

Her office did not say how many individuals took part in the survey, but out of those affected, 44 per cent said they will face a tax bill of at least £300,000, with the average bill standing at £637,000 and the highest at £3m.

Ms Voaden said the data “contrasted sharply with the government’s data”.

She said: “Ever since this policy was announced, the government has repeatedly shown it has its head in the sand about the true number of farmers that will be affected.

“My survey offers a snapshot of not only what’s happening in South Devon but across the country as farmers try and figure out how they’ll cover these eye-watering costs.”

She dismissed reports saying that many so-called farmers are in fact wealthy individuals who previously bought up large swathes of land to avoid paying inheritance tax, and claimed that her survey showed that it was not a prevalent problem among South Devon farmers.

“Nearly all plan to pass their farm onto their direct descendants. Yet many will not be able to do this because of this policy. This tax will only raise small amounts of money for the Exchequer, but the impact on rural communities will be huge.”

She said her Lib Dem party would continue to pressure the government to reverse the decision, otherwise farms that had been in families for generations “will have to be broken up to cover the costs”.

This would have a “worrying impact” on food supply and on the rural economies that rely on farming, she concluded.