President Trump defends ‘death tax’ exemptions for farmers

The UK farming sector has heaped praise on US president Donald Trump after he strongly defended the principle of exempting farms from “estate tax” – the US equivalent of inheritance tax (IHT) – during an exchange with UK prime minister Sir Keir Starmer.

The two were hosting a press conference on Monday (28 July) at Mr Trump’s Turnberry golf course in south-west Scotland.

See also: Record farm closures amid IHT reforms and rising costs

Asked about the importance of farmers to a country, especially in the context of IHT treatment, Mr Trump said he loved farmers, but they were often “land rich and cash poor”.

“So in our tax bill we have a clause that is very important,” he said.

“We were losing a lot of farms to the banks because a loving mother and father would die and left their farm to their children.

“But they had a 50% tax to pay. They would then go out and borrow money to pay the estate tax – or the death tax as it’s called – and they would overextend and they would lose the farm.”

Mr Trump added that many farmers in the US had taken their own lives because of the estate tax.

“So we have totally ended the estate tax.

“When a parent leaves a farm to the kids, they do not have to worry about their local banker coming in and stealing their farm.” 

‘Different situation’

Sir Keir was quick to defend the UK government’s position, saying the UK Treasury’s 20% IHT proposal was very different.

“Our levels are nowhere near 50%,” he said.

“We’ve just introduced [a system] where it is paid over many years and works out at an extra 2% a year over 10 years.

“The other thing we’ve done, as you know, is make sure we have a pathway for farmers which actually increases their year-on-year income, which is the most important thing.”

Sir Keir added that farmers were a prime consideration in the government’s trade deals – such as the UK-US trade deal – to ensure their incomes were protected.

Social media response

Farm leaders were quick to pick up on the comments on social media platform X.

“Thank you for backing your farmers, Mr President. We need our government to do the same and #StopTheFamilyFarmTax,” posted the NFU.

NFU deputy president David Exwood added that, while the US did actually charge estate duty, it was only above a threshold of $15m per person (or $30m per couple) compared with the UK’s proposed £1m threshold for agriculture. “A £1m limit here is way too low!” he said.

Mo Metcalf-Fisher, external affairs director with the Countryside Alliance, said the prime minister looked decidedly awkward as president Trump set out the steps he has taken to help US farmers escape estate tax.

“It comes as a record number of farms were forced to close this year in wake of the Budget,” he posted.

Cumbrian beef and sheep farmer Matthew Blair wanted to know what “pathway” Sir Keir was referring to that would help farmers increase their income annually, while Conservative shadow farming minister Robbie Moore said the #familyfarmtax was having “catastrophic consequences”.

“What will it take for him to listen?” he asked.