Farming leaders’ fury as Treasury stands firm on inheritance tax change

Agricultural leaders left a meeting with the Treasury with “boiling blood” after the UK Government faced down their arguments to rethink proposed changes to inheritance tax on farms.

Ministers stood firm on proposals to introduce a 20% inheritance tax rate on agricultural land and businesses worth more than £1 million, essentially scrapping an exemption which meant no tax was paid to pass down family farms.

The plans continue to face intense opposition from the sector, which says cash-poor, asset-rich farmers will be forced to sell their land, investment will stall, and the families of elderly or vulnerable farmers who do not have time for succession planning will be the most affected.

Despite ongoing farmer protests, Labour has insisted it will not reconsider the proposed changes, which are due to come into force from April 2026.

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'Deeply disappointed'

Following the meeting, Farmers' Union of Wales (FUW) President, Ian Rickman said: “We are deeply disappointed by the Treasury's dismissive response to our compelling case against the detrimental impact of the Inheritance Tax changes for Welsh family farms.

“Together with other UK farming unions, we clearly outlined the potential economic, emotional and cultural devastation these changes could inflict on farms and rural communities across Wales, and our domestic food production. Crucially, we offered our willingness to collaborate with the government and industry stakeholders to address the flaws in this ill-thought-out policy.

“Regrettably, it seems these arguments have fallen on deaf ears. Serious questions remain about the Treasury's own figures and given steep trajectories in land prices and the current and historically low farm profits for the farm types which predominate in Wales, such inheritance tax bills would be unaffordable for a significant proportion of family farms. We continue to hold grave concerns about these changes and will liaise further with our membership regarding the best way forward.”

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'Really cross'

NFU president Tom Bradshaw told reporters that the group of representatives were “really cross today”.

He said the Government showed “no movement” on the policy after they outlined their concerns and put forward solutions.

“The Government resolutely believe that they are correct and that they are generous in the exemptions they are giving us,” he said.

“They don’t care about the human impact. They don’t care about the intergenerational impact. They don’t care about the impact on tenant farmers and the geopolitical situation that the world faces today.”

Mr Bradshaw said the Government rebuffed proposed suggestion for a “clawback” mechanism, which would ensure farms face tax charges only when assets are sold.

“The door is shut from the Treasury,” he said before adding: “The reaction from our members is going to be one of fury, one of real anger, one of desperation that we’ve seen over recent months and it’s what we all feel here today.”

Sector representatives have already spoken with Prime Minister Sir Keir Starmer among other officials to discuss the dispute but Tuesday marked the first time they met with the Treasury.

'Arrogance'

Afterwards, they criticised Chancellor Rachel Reeves, who is still yet to meet them, claiming she has displayed “arrogance” in not seeking to justify the policy herself since she announced it in the Budget.

“If the Chancellor believes this policy is right, if the Chancellor is willing to own the outcomes of this policy, if the Chancellor is willing to run down our rural economies, to risk the future of domestic food production, then the Chancellor should look us in the eyes and tell us that she’s right,” Mr Bradshaw said.

“I don’t think we know what to do next, quite genuinely,” he added.

“We’ve done our best to try and work with Government. We’ve gone in there today offering a solution and yet they’re saying: ‘No, we are right’ without any comprehension of how the industry really works”.

The NFU president said they will nonetheless work to gather political support for a vote against the Finance Bill expected in autumn, focusing on bringing backbench MPs onside.

“Now I’m not underestimating the scale of that challenge, but when we think the impacts on our industry are as potentially damaging as we do, we’re not just simply going to go away because they’ve said no again,” he said.

The Conservatives and Liberal Democrats immediately sought to throw their support behind the industry as they criticised the Government’s unwillingness to budge.

'Damage'

Shadow environment secretary Victoria Atkins said: “The Government has been endlessly warned of the economic and emotional damage their family farm tax is having across the countryside, but once again they’ve arrogantly ignored the warnings and stuck pig-headedly to their ideological dogma.”

Liberal Democrat environment spokesman Tim Farron said the Government is “throwing farmers to the wolves” before describing the tax as potentially the “final nail in the coffin for many communities struggling to cope”.

Ann Davies MP, Plaid Cymru Agriculture Spokesperson said: “Labour’s refusal to listen shows they simply don’t care about Welsh farming. The UK Government’s approach ignores the reality of family-run, cash-poor but land-rich farms that are now at risk. Plaid Cymru is calling for a Wales-specific impact assessment because our farmers deserve policies that reflect their needs.”

A Government spokesperson said: “We regularly meet representatives of the farming industry to listen to their views, but strongly believe this is a fair and balanced approach which helps fix the public services we all rely on.

“Our reforms to Agricultural and Business Property Relief will mean three quarters of estates will continue to pay no inheritance tax at all, while the remaining quarter will pay half the inheritance tax that most people pay, and payments can be spread over 10 years, interest-free.

“We are also investing £5 billion into farming over the next two years, the largest amount for sustainable food production in our country’s history, and are going further with reforms to boost profits for farmers by backing British produce and reforming planning rules on farms to support food production.”