In a significant victory for British agriculture, the government has announced a major increase in inheritance tax relief for family farms, following a sustained campaign by the National Farmers' Union (NFU).
A Fourteen-Month Campaign Bears Fruit
The change, confirmed in the final days of 2025, sees the threshold for both Agricultural Property Relief (APR) and Business Property Relief (BPR) raised from £1 million to £2.5 million. This decision comes after 14 months of intense lobbying by the NFU and its members, which included direct talks with Labour backbenchers representing rural constituencies.
The pressure culminated in a notable rebellion during the vote on Budget Resolution 50, where nearly 40 MPs abstained. This display of dissent underscored the depth of concern over the policy originally announced in the 2024 budget, which farmers had dubbed the "family farm tax."
From Shock and Fear to a Lifeline
The original proposal to remove relief on assets over £1 million sent shockwaves through the farming community. For generations, the standard advice was to hold the farm until death, allowing it to pass intact to the next generation to maintain a viable business. The new threshold threatened to impose unplanned tax bills of hundreds of thousands of pounds on many estates, jeopardising investment and potentially making food-producing businesses unviable.
NFU President Tom Bradshaw described the impact as particularly severe for the elderly and vulnerable, who were unable to use gifting rules to mitigate the tax. He reported taking anxious calls from relatives fearing for their family's legacy, with some "literally staring into the abyss."
Government Engagement and a Path Forward
Bradshaw acknowledged constructive engagement from the highest levels of government, including two meetings with Prime Minister Sir Keir Starmer and numerous conversations with Defra Secretary of State Emma Reynolds. He credited Reynolds with playing a key role in highlighting the human impact of the policy.
While the increased threshold will protect the majority of small, family farms, the NFU remains fundamentally opposed to the tax. Bradshaw confirmed the union will urge all political parties to commit to its complete removal in their next general election manifestos.
The Backbone of Britain Secures a Firmer Foundation
This policy shift is seen as a critical step in rebuilding the government's relationship with rural Britain. Bradshaw expressed hope that as 2026 begins, the sector has "firmer ground from which to move on." He emphasised the foundational role of British farming, which supports a £155 billion food and drink sector and nearly four million jobs.
Beyond economics, he noted farms are the beating heart of rural communities, shaping the nation's iconic landscapes from Northumberland to Cornwall. With the UK population set to reach 70 million, securing domestic food production through supportive policy is now more urgent than ever.
