Farmers pour savings into fine wine to avoid Rachel Reeves tax raids

UK farmers are seeking refuge from Labour's planned tax raid by investing in fine wine. Moncharm Wine Traders has seen a 32% increase in business from farming clients since the October Budget in 2024, when Chancellor Rachel Reeves proposed to cap agricultural and business property relief at £1 million. The move, dubbed by critics as a "tax raid on the countryside," has sent shock waves through the industry, resulting in agricultural workers looking for alternative ways to protect their assets.

For some, fine wine has become a tax-efficient way to preserve wealth, pass it on and avoid being caught in the Treasury's net. Under current rules, investors can add a beneficiary's name to their wine holdings, achieving joint ownership after seven years, making them inheritance-tax free. Fine wine is also exempt from capital gains tax.

John, a farmer and Moncharm client from Llandovery in Wales has turned to investing in wine to combat the "negative changes".

"It feels like farmers were a big target last year, but we're not alone," he said.

"Everybody has felt change since the new government came in, and it doesn't look like it's worked so far. It looks like there's going to be even more [negative] changes to come for everybody in October.

"I [invest] in wine because farming is a job that becomes a way of life, and requires me to have hands-off investments. I like owning my assets, and wine has become more important of late, due to the tax advantages."

Moncharm, who manages 21,275 bottles of wine, says the demand for tangible, low-volatility, tax-efficient assets is only going to grow as the government ramps up fiscal pressure on wealth.

Matthew Knight of Moncharm Wine Traders, said: "Farmers are worried - and rightly so. These tax changes make it harder for them to pass on what they've worked a lifetime to build. Tangible assets like fine wine offer a proven, discreet and long-term way of protecting wealth from the Chancellor's reach. It's no surprise we've seen such a surge in interest.

"Our £61m milestone is proof that fine wine isn't just a passion - it's a serious asset class that can deliver stability, growth and strategic tax advantages at a time when traditional wealth vehicles are under siege and the recent demand from farmers proves that it is a necessity in 2025."