Farming minister Dame Angela Eagle ends IHT speculation

Regardless of the numerous protests carried out by the farming sector in recent months, the government still plans to remove agricultural property relief and business property relief on inheritance tax for all farm estates valued over £1 million from April 2026.

Recently, both media and the farming community have speculated that the Labour government may abandon or alter its IHT plans. However, the latest statement from Dame Angela Eagle offers farmers little hope for change.

The farming minister said: “Despite some of the speculation in the press, there’s no likelihood that will happen. The announcements have been made, and the situation will be as it was announced.

“[…] “I’m afraid there aren’t going to be any changes with respect to the announcement that were made previously about inheritance tax in this instance. We have been in discussions, the Treasury have made their announcements, and they aren’t going to move.”

‘Putting heaviest burden on working farming families’

NFU president Tom Bradshaw explained that the family farm tax is not a fair and balanced approach to reform.

“It does little to target those who seek to shelter wealth from inheritance tax, instead putting the heaviest burden on working farming families. Many will not be able to afford the tax at all, while others will have to halt investing in their businesses to pay it.

“Multiple solutions have now been provided which would better protect Britain’s family farms while generating the required revenue for the Treasury, from the NFU’s clawback mechanism to CenTax’s minimum share rule.”

Back in August, the Centre for the Analysis of Taxation (CenTax) issued a report, which claims that proposed changes to inheritance tax (IHT) reliefs would protect family farms ‘to a large extent’.

However, the report also states that the reforms could be better targeted, and while it does not support the ‘clawback’ that the industry has clamoured for, it makes a series of recommendations for improvements to the plans.

The report suggested the following potential adjustments:

• Minimum share rule: Removing relief from estates for which farm and business assets are a relatively minor share

• Upper limit on relief: Restricting relief to the first £10 million of claim, with no additional relief above this limit

• Transferable allowance: Making the combined allowance transferable between married couples, meaning that any unused allowance on the first death could be carried over to the surviving spouse.

‘Thousands of farmers are making hard choices’

Mr Bradshaw continued: “This issue has not and will not go away. The government still has time to adjust the policy in the upcoming Budget, so it is more targeted and prevents working families, and the growth of the farming sector, from becoming collateral damage.”

Victoria Vyvyan, CLA president, added: “The Treasury says these reforms will barely touch rural Britain. But they already have. Thousands of farmers are making hard choices about farms they’ve looked after for generations.

“Some are shelving investment and plans for the future. Others are wondering if they’ll even have a legacy to hand on at all. If the government wants growth, it must stop punishing the people who feed our country, run our shops and keep the countryside alive.”

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