Government waters down inheritance tax plan for farms

Government plans to tax inherited farmland have been watered down, with the target threshold rising from £1 million to £2. 5m. Farmers' protests and skepticism from some Labour backbenchers fueled the rise. Ministers announced at last year's Budget that they would implement a 20% levy on inherited agricultural assets worth more than £1 million from April 2026.

We've listened closely to farmers around the country, and we're making changes today to shield more traditional family farms,

Environment Secretary Emma Reynolds said.

It's only right that larger estates contribute more, but we support the farms and trading companies that are the backbone of Britain's rural communities.

The National Farmers Union leader Tom Bradshaw welcomed the change, telling BBC Radio 5 Live that it

takes out many family farms from the eye of a perplexing storm.

The government deserves praise for recognizing the inconsistencies in the original program and changing direction,

Gavin Lane, President of the Country Land and Business Association, said.

However, this news only limits the risk; it does not completely eliminate it. "Many family businesses will have enough expensive machinery and land to be worth above the threshold, but family businesses continue to operate on such tight profit margins that make this tax burden unaffordable.

Farmers have organized weekly demonstrations outside Parliament in the 14 months since the initial plan was announced. Any Labour MPs in rural areas have also expressed worry. A dozen backbenchers abstained, and one, Markus Campbell-Savours, voted against the bill at a recent parliamentary election. CaMPbell-Savours was later suspended for voting against the government, iMPlying he now serves as an independent MP.