The Labour government has reversed its controversial inheritance tax plans for farmers following widespread protests and backlash from rural communities. Ministers announced on Tuesday that the threshold for 100% relief on agricultural property will be raised from £1 million to £2.5 million.
Under the revised proposals, spouses or civil partners can pass on up to £5 million in qualifying agricultural or business assets before paying the levy, on top of existing allowances. The move comes after farmers staged protests in London, including blocking Whitehall with tractors on the day of Chancellor Rachel Reeves' Budget last month.
Environment Secretary Emma Reynolds said: 'Farmers are at the heart of our food security and environmental stewardship, and I am determined to work with them to secure a profitable future for British farming. We have listened closely to farmers across the country and we are making changes today to protect more ordinary family farms.'
Baroness Minette Batters, former head of the National Farmers' Union (NFU), warned that the original proposals had led to farmers contemplating suicide. NFU president Tom Bradshaw welcomed the changes as a 'huge relief to many', saying they would 'greatly' reduce the tax burden for family farms. However, the Liberal Democrats called for the tax to be scrapped in full, arguing that many family farms would still face financial hardship.
