Government waters down farm inheritance tax plan
Government proposals for taxing inherited farmland have been softened and the planned threshold has been increased from £1 million to £2.5 million.
The escalation follows months of protests by farmers and concerns from some Labor supporters.
In last year’s Budget, ministers announced they would introduce a 20% tax on inherited agricultural assets worth more than £1 million from April 2026.
Environment Minister Emma Reynolds said: “We’ve listened closely to farmers across the country and today we’re making changes to protect more ordinary family farms.”
“It is right that larger estates contribute more as we support the farms and commercial businesses that form the backbone of Britain’s rural communities.”
Tom Bradshaw, chairman of the National Farmers’ Union, welcomed the change in a statement to BBC Radio 5 Live, saying it had “taken many family farms out of the eye of the dangerous storm”.
Gavin Lane, Chairman of the Country Land and Business Association, said: “The Government deserves praise for recognizing the flaws in the original policy and changing course.
“However, this announcement only limits the damage, it does not eliminate it completely.
“Many family businesses will own expensive enough machinery and land to be valued above the threshold, but still operate on such narrow profit margins that this tax burden will remain unaffordable.”
