A furious 64-year-old Scottish farmer who has invested decades of his life into building the family’s Ayrshire farm up says the Labour Government’s inheritance tax changes will “rip the heart out of UK food production”.
Willie Campbell, from Low Holehouse Farm at Galston, said he felt “outraged, disgusted and deeply betrayed” by the Labour government, who he claimed “has no regard for farmers”.
Campbell and his son Robert, 33, work the family farm with their respective wives, Margaret and Rachel.
It had always been Campbell’s ambition to hand a thriving farm over to his son, just as the generations before him did, without being heavily taxed on it.
As it currently stands, farmland is exempt from inheritance tax under Agricultural Property Relief.
However, in the 2024 Budget, Labour Chancellor Rachel Reeves announced she would end that exemption by restricting APR.
From April 2026, a tax of 20 per cent will apply to agricultural assets over £1mn, which could rise to £3mn if two parents are leaving a farm to their children.
Willie’s Low Holehouse Farm, which has been traditionally handed down through the generations, now extends to 550 acres owned and another 50 acres rented.
Historically, this was a typical mixed farm that has evolved over the years to predominantly a dairy farm today.
“My mother and father moved to Low Holehouse Farm back in 1967 when I was five years old,” said Willie. “Most of the infrastructure at that time was just old derelict buildings and we had 140 acres then.
“As I grew up on the farm we rented land and bought more land, which was about 14 miles away. Eventually we sold that plot and bought closer to home. Now our 550 acres is all within a two mile radius of the farmyard.”
How Low Holehouse has grown over the decades
Low Holehouse Farm has 200 Fleckvieh Montbeliarde crossbred dairy cows.
The Campbells rear their own beef calves from the dairy herd, and with the addition of some bought-in store cattle, aim to fatten 200 beef animals a year.
The farm also buys up to 400 store lambs from the Scottish Highlands to fatten on their surplus lowland grazing over the winter months.
The milking herd is averaging 7,500 litres per cow per year on around 1.8 tonnes of concentrates, at 4.2 per cent butterfat and 3.4 per cent protein.
Campbell’s son Robert is the third generation to work on Low Holehouse Farm but is a fourth-generation farmer, following in his great-grandfather’s steps who started farming just after WWII.
When it comes to value, William Campbell said his farm was worth approximately £6mn – but of course that is just on paper, and not liquid cash in a bank account.
He said: “I counted it up that 550 acres at a modest £6,000 per acre is £3.3mn. The 600 head of cattle is worth over £300,000 and machinery over £1mn.
“Our houses and farm infrastructure is worth another £750,000, so all told our farm could be worth in the region of £6mn, depending on land values.
“What people need to realise is that figure does not mean we are wealthy. It simply means the tools we need to produce food for this country are very expensive.
“Our return on investment is usually from zero to five per cent, if we are lucky. The government wants us to pay 20 per cent tax on 75 per cent of the value of our farm.
What people need to realise is that figure does not mean we are wealthy. It simply means the tools we need to produce food for this country are very expensive.
“There is no way we could stay in business under those financial constraints, even more so with our costs of production steadily climbing each year.”
Campbell added: “In our circumstance, because my wife and I are in a business partnership, the IHT due on our place would be rated at 20 per cent of anything over £3mn.”
He said that, even if this sum had to be paid over the suggested 10-year timeframe, there was “no way” the figures stacked up in the family’s favour.
Although the government said this could be paid back interest free, this is not necessarily the case – as the family would have to pay interest on the money we would need to borrow to pay the IHT.
Erosion of value
Campbell added: “One thing that nobody seems to have picked up on is that our net capital is going to be eroded because that tax liability is going to show on the balance sheet for the first year.
“And once it shows there, your ability to borrow money has greatly diminished.”
The family’s goal in planning to hand over the farm to their son, was to pass down a viable business that Robert could work, in order to provide for his family.
Campbell said: “Farmers are not handing over wealth; they are handing over the business that they have invested heavily in to the next generation to supply consumers with food.”
With the average turnover of a generation on a farm being 30 years, their son would have to spend the first third of his farming career paying off a huge tax bill.
He said this would hamper their son’s ability to invest in the farm to make it more efficient, as the speed of development for technology speeds up.
Campbell has just survived a horrific farm accident which has reinforced his concerns about IHT.
He said: “I was very lucky to survive the accident, but I will be laid up for some weeks to recover. If the worst had of happened, there is no way my son could have currently paid the tax.
“As sad as it is, some farmers are already in a very dark place over this daft tax dreamt up by Labour. It just could be enough to push them over the edge,” he said.
Zero confidence in the government
This came as confidence in the Labour government among farmers has hit rock bottom, with a new poll of 500 farmers discovering not one of them would vote Labour next time around.
Almost 80 per cent of respondents to the survey, conducted by the Country Land and Business Association, said they were worried their business will not survive the next 10 years.
Among other findings from the survey:
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More than 60 per cent have considered selling their farm and leaving the industry.
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None would vote Labour at the next election
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Some 36 per cent said they would back Reform, with the Conservatives on 38 per cent.
With the threat of IHT looming, some farmers are understandably hesitant to invest in their businesses going forward, while others worry they cannot hand their farms over at all.
The poll also found 69 of respondents said they would have to sell land or take out loans to keep their business, with nearly half predicting they will have to sell at least a quarter of their farm.
It also found 89 per cent have paused or delayed investment since the budget, with 27 per cent saying they have held back from investing over £150,000.
CLA President Victoria Vyvyan said: “Rural Labour MPs can see what’s coming.
“They know it will drain the life from the countryside and strip away the trust of the people who sent them to Westminster. If they support it, their voters won’t forget.”