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PA Media<\/p>\nKate Whannel,political reporter,<\/p>\n
Georgia Roberts,Derby political reporterand<\/p>\n
Joe Pike,politics investigations correspondent<\/p>\n
PA Media<\/p>\n
Farmers protested against the changes again at last month’s Budget <\/p>\n
Government proposals to tax inherited farmland have been watered down, with the planned threshold increasing from \u00a31m to \u00a32.5m.<\/p>\n
The climbdown follows months of protests by farmers and concern from some Labour backbenchers.<\/p>\n
At last year’s Budget, ministers said they would start imposing a 20% tax on inherited agricultural assets worth more than \u00a31m from April 2026, <\/b>ending the 100% tax relief that had been in place since the 1980s. <\/p>\n
In an announcement put out after MPs had left Parliament for the Christmas recess, Environment Secretary Emma Reynolds said: “We have listened closely to farmers across the country and we are making changes today to protect more ordinary family farms.”<\/p>\n
“It’s only right that larger estates contribute more, while we back the farms and trading businesses that are the backbone of Britain’s rural communities, ” she said. <\/p>\n
Head of the National Farmers’ Union Tom Bradshaw welcomed the change, telling BBC Radio 5 Live it “takes out many family farms from the eye of a pernicious storm”.<\/p>\n
Gavin Lane, president of the Country Land and Business Association, said: “The government deserves credit for recognising the flaws in the original policy and changing course.<\/p>\n
“However, this announcement only limits the damage – it doesn’t eradicate it entirely. <\/p>\n
“Many family businesses will own enough expensive machinery and land to be valued above the threshold, yet still operate on such narrow profit margins that this tax burden remains unaffordable.”<\/p>\n
Ben Ardern, a farmer from Derbyshire, told the BBC said it was “a step in the right direction”.<\/p>\n
He said the government should “drop it [the tax] for family farms… and just tax the people who have got the money to tax.<\/p>\n
“The big corporations who have just buried money into land – they’re not farmers, they have just done it to avoid tax. Farmers haven’t bought land to avoid tax, we’ve bought land to farm it and grow food.”<\/p>\n
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<\/p>\n
Ben Ardern, a third generation beef and dairy farmer from Buxton, has organised protests against the tax<\/p>\n
In the 14 months since the initial proposal was announced, there have been regular protests by farmers outside Parliament. <\/p>\n
Some Labour MPs in rural areas have also expressed concern. At a recent parliamentary vote on the plan, a dozen backbenchers abstained and one, Markus Campbell-Savours, voted against.<\/p>\n
Campbell-Savours was subsequently suspended for voting against the government, meaning he now sits as an independent MP.<\/p>\n
John Whitby, a Labour MP from the Rural Research Group of backbenchers, said the government’s climbdown on inheritance tax was “fantastic news”.<\/p>\n
But one Labour source described the timing of the change as “bizarre”.<\/p>\n
They added that many MPs would be annoyed as “they were made to vote for it so recently”.<\/p>\n
Conservative leader Kemi Badenoch said in a post on social media: “This fight isn’t finished. <\/p>\n
“Other family businesses are still affected by Labour’s tax raid, and we will keep pushing until the tax is lifted from them too.”<\/p>\n
Liberal Democrat spokesperson Tim Farron MP said: “It is utterly inexcusable that family farmers have been put through over a year of uncertainty and anguish since the government first announced these changes.<\/p>\n
“We demand that the government scraps this unfair tax in full and if they refuse to, Liberal Democrats will submit amendments in the new year to bring it down.”<\/p>\n
Reform UK deputy leader Richard Tice said: “This cynical climbdown – whilst better than nothing – does little to address the year of anxiety that farmers have faced in planning to protect their livelihoods… with British agriculture hanging by a thread, the government must go further and abolish this callous farms tax.”<\/p>\n
In her first Budget in 2024, Chancellor Rachel Reeves announced she would be reversing the 100% inheritance tax relief on agricultural assets that had been in place since the 1980s.<\/p>\n
The move would have seen inherited agricultural assets worth over \u00a31m taxed at 20%, half the standard inheritance tax rate, raising an estimated \u00a3520m annually by 2029.<\/p>\n
The government had argued that the change would protect smaller farms while stopping wealthy investors from buying farmland as a tax loophole. <\/p>\n
However, it has now stepped back from the original proposal raising the threshold level to \u00a32.5m.<\/p>\n
Coupled with an exemption which allows farmers to pass on assets to their spouses tax-free, this new government concession means a couple could pass on up to \u00a35m in qualifying assets, without paying tax. <\/p>\n
Above the threshold, a 50% relief will be applied to the remaining assets. <\/p>\n
According to the government, the number of estates in the UK expected to pay more inheritance tax in 2026\/27 will be reduced from around 2,000 under the original plans to 1,100 under the new proposal. <\/p>\n
A Treasury source said changing the thresholds would cost the government \u00a3130m, but that there were “no plans” for the policy to be scrapped entirely.<\/p>\n
“The principle of reforming the tax system remains,” the source said. “It’s right that the wealthiest estates pay their fair share, but smaller farms will get help.”<\/p>\n
The climbdown is the latest in a series of U-turns the government has made since being elected in July 2024. <\/p>\n
Earlier this year the government eased cuts<\/a> to winter fuel payments and backtracked<\/a> on plans to make \u00a35bn of cuts to the welfare bill. <\/p>\n","protected":false},"excerpt":{"rendered":"Kate Whannel,political reporter, Georgia Roberts,Derby political reporterand Joe Pike,politics investigations correspondent PA Media Farmers protested against the changes…\n","protected":false},"author":3,"featured_media":467176,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[50,103],"class_list":{"0":"post-467175","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world","8":"tag-news","9":"tag-world"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115770395878253646","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/467175","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=467175"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/467175\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/467176"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=467175"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=467175"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=467175"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}