Rachel Reeves humiliated as farmers avoid IHT tax raid with Junior ISA trick

Farmers and rural families are rapidly turning to Junior Individual Savings Accounts (ISAs) to shield family wealth from Rachel Reeves's proposed inheritance tax (IHT) changes, new figures from NFU Mutual indicate.

The UK's leading rural insurer reported a dramatic 115% surge in new stocks and shares Junior ISAs opened in the first three months of 2025 compared with the same period last year. Additional contributions to existing Junior ISAs have also nearly doubled, with the average sum invested in new accounts rising from £2,400 to £4,100, and top-ups increasing from £2,700 to £3,900. David Nottingham, personal finance expert at NFU Mutual, said: "More and more of our rural customer base are turning to junior ISAs with parents and grandparents using them as a tax-efficient way to invest for a child's future, particularly as they are considering the implications of proposed inheritance tax changes."

This spike in Junior ISA activity comes in response to the Government's 2024 autumn Budget, which outlined sweeping IHT reforms. Among the most significant proposals are changes to agricultural property relief and a plan to count unspent private pension wealth as part of an estate for IHT purposes from April 2027.

The changes to Agricultural and Business Property Relief have been proposed to come into effect as early as April 2026. Previously, the relief offered a full exemption for certain assets. Now, proposals mean it will only cover the first £1million, with any amount above this taxed at a reduced relief rate of 50%, effectively imposing a 20% tax.

These measures are expected to pull more rural families into the inheritance tax net, prompting many to reconsider how they pass on wealth to the next generation.

Mr Nottingham continued: "The junior ISA allowance more than doubled in 2020 to £9,000 each year, and since then, there has been extra interest in the savings product, which has enabled families to shelter more from HMRC."

Junior ISAs must be opened by a parent or guardian, but once set up, anyone can contribute up to £9,000 per year tax-free. The funds are locked until the child turns 18, though they can take control of the account at 16.

According to the latest Government data, the average national subscription to a Junior ISA in 2022-2023 was £1,220, with 1.5 billion subscribed overall and 42% of that in cash.