All conacre land could become subject to 40 per cent inheritance tax under a change in ruling being pushed through by HM Revenue and Customs.
Test cases already underway could result in the removal of Agricultural Property Relief on land rented out under conacre - with potentially devastating consequences for the industry in Northern Ireland.
Such a move would leave bereaved families facing a tax bill that could run into tens of thousands of pounds, with many being left with no choice but to sell their land.
As Finance Minister Sammy Wilson, accompanied by DARD Minister Michelle Gildernew, prepares for a showdown with Treasury officials over the decision to remove Business Property Relief from conacre land with development potential, he has warned that there may be worse to come.
The only way left for farmers to avoid their family losing out may be not to retire but keep on working until they die or pass on the land to their children early enough that they don't fall for Capital Gains Tax on the present landowners death.
And that will hit other farmers who are depending on conacre to provide them with enough land to make their businesses viable or to give them the room to expand.
HM Revenue and Customs (HMRC), in seeking to raise revenue, is looking at a range of options that could impact on farming in the province.
About one third of the land in Northern Ireland is rented out in conacre which equates to some 800,000 acres. Historically, it has been accepted by HMRC that agricultural land that is rented to other farmers in conacre is part of normal agricultural practice.
Mr Wilson said: "It is clear that the conacre tax ruling has the potential to impose large inheritance tax bills on local farming families.
"I am well aware that any enforced sale of land would be a hugely emotive issue, with potential negative ramifications that I do not underestimate.
"I am also aware of widespread fears that letting land in conacre may no longer be deemed an agricultural activity, meaning Agricultural Property Relief would also be denied.
"There are also reports circulating within the local agricultural community that there may be quite a number of these cases outstanding."

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October 16th 2009
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