Government waters down inheritance tax plan for farms

"We have listened closely to farmers across the country and we are making changes today to protect more ordinary family farms. 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."

"The government deserves credit for recognising the flaws in the original policy and changing course. However, this announcement only limits the damage - it doesn't eradicate it entirely. 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."

"takes out many family farms from the eye of pernicious storm"

Ministers increased the inheritance-tax threshold for agricultural assets from £1m to £2.5m, scaling back a planned 20% levy due from April 2026. The change aims to protect more ordinary family farms while expecting larger estates to contribute more. Farming groups welcomed the adjustment but warned many family businesses could still exceed the threshold because of land and expensive machinery despite slim profit margins. Persistent protests outside Parliament and concern from rural MPs, including abstentions and one suspension after a dissenting vote, helped prompt the policy alteration. Opposition voices say affected businesses remain at risk.

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