The National Farmers’ Union (NFU) has expressed concern that the proposed inheritance tax rates will have negative effects on working farms in the UK after a new study was published.

According to a new report by the Centre for the Analysis of Taxation, 480 farm estates are set to be affected by the extra inheritance tax.

Around 20% of non-farming landowners would pay higher taxes, while 50% of owner-farmers would be subject to higher tax rates.

Tom Bradshaw, NFU’s president, said: “This is not a fair and balanced approach to reform and does little to counter those who seek to shelter wealth from inheritance tax by simply investing in farmland.

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“There are interesting adjustments within the report that appear to mitigate the impacts on the most vulnerable in our community and enable farms to invest in the future of food production with greater confidence.”

He added: “We think this new independent analysis presents a positive and timely opportunity ahead of the Finance Bill for fresh conversations with government and officials that would allow us all to work together to address issues of fairness and affordability within the proposals. The NFU urges the Government to grasp this opportunity.”

However, the report also revealed that 86% of the affected farm estates would be able to pay their inheritance tax bill from non-farm assets, while 70 farm estates will not be able to afford it.

Last month, Steve McLean, Marks and Spencer’s head of agriculture and fisheries, warned higher inheritance tax rates may deter young people from joining the industry.

He told BBC Wales “The whole taxation system was devised to recognise that the margins of profitability in agriculture weren’t like other industries. That’s why you had a difference in how the inheritance tax approach was set up.”

“They (the proposed changes) definitely will be a deterrent for young people coming into the industry, and we want to see a vibrant, viable farming structure where young people can come in and make a good living and be proud of what they do. So being able to give greater surety and greater security is going to be key to a viable farming structure going forward.”