Inheritance tax reforms introduced in the Chancellor’s Autumn Budget are already having a “chilling effect” on farming and rural businesses in Scotland, John Swinney has said.

Speaking ahead of an address at the AgriScot conference in Edinburgh on Wednesday, the First Minister said the decision to remove some inheritance tax relief from farms was causing “unacceptable levels of stress” among farmers.

Under plans announced in the Budget, inheritance tax will be charged at 20% on agricultural assets above £1 million, although Chancellor Rachel Reeves has said that in some cases the threshold could in practice be about £3 million.

Mr Swinney said it was “deeply disappointing” that the Scottish Government was not consulted on the change, and he called on the UK Government to “urgently” commit to publishing impact assessments of the proposals on farmers and crofters in Scotland.

He also called for clarity from the UK Government on the future of financial support for the sector, adding that breaking the link between land area farmed and funding increases in Scotland could “constrain our efforts to transform our industry for the future”.

The First Minister said: “The Chancellor’s decision to reform exemptions to agricultural property relief for inheritance tax has led to unacceptable levels of stress, worry and uncertainty amongst farmers in Scotland.

“The UK Budget could scarcely have been more indifferent to the needs of rural communities and the rural economy, on top of a lack of certainty over long-term funding, which we would have through membership of the EU, meaning we now have an inadequate settlement.

“I know this is already having a chilling effect on farming and rural businesses. The UK Government must urgently commit to undertake and publish impact assessments on its budget proposals on farmers and crofters in Scotland.

“Fundamentally, the Scottish Government wants to see a tax system that supports rather than hinders orderly succession planning and the transfer of land to the next generation of custodians.

“No matter whether or not a significant number of businesses are affected directly, it is deeply disappointing that the Chancellor chose not to work with the Scottish Government before acting on this sensitive matter.

“The UK Government must also provide clarity on the future of financial support for the sector, after confirming in the Autumn Budget that agricultural funding will be baselined.

“Any move to break the link between land area farmed and funding increases in Scotland ignores our ongoing commitment to active farming and food production, and could constrain our efforts to transform our industry for the future.”

A UK Government spokesperson said: “This budget took the difficult decisions to fix the public services crumbling across the United Kingdom, including Scotland, and address the £22 billion fiscal black hole inherited from the previous government.

“With 40% of agricultural property relief going to the 7% of wealthiest claimants, we made the decision to ensure the relief is fiscally sustainable.

“Around 500 claims each year will be impacted and farm-owning couples can pass on up to £3 million without paying any inheritance tax – this is a fair and balanced approach.”