UK softens stance on farm tax after months of protests

Britain’s government said on Tuesday it would scale back its plan to raise more tax from farmers, following months of protests since the introduction of an inheritance tax charge on farms was announced in 2024.

From April, the threshold for individual inheritance tax relief will rise to 2.5 million pounds ($3.4 million) from 1 million pounds, significantly reducing the number of farms and agricultural business owners facing higher tax bills, the government said.

“We have listened closely to farmers across the country and we are making changes today to protect more ordinary family farms,” Environment Secretary Emma Reynolds said in a statement.

“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,” she said.

Tom Bradshaw, president of the National Farmers Union, said the original proposals represented a “pernicious and cruel tax” that his organisation had fought for 14 months.

“I am thankful common sense has prevailed and government has listened,” Bradshaw said. “From the start the government said it was trying to protect the family farm and the change announced today brings this much closer to reality for many.”

TRACTOR PROTESTS IN LONDON

The move represents the latest policy reversal by Prime Minister Keir Starmer’s government. In July, it backed down on plans to cut welfare spending, and in June it scaled back a proposal to reduce subsidies on energy bills for the elderly.

Under the revised rules, 100% relief will apply up to the new 2.5 million pounds threshold, with 50% relief on assets above the new level. Spouses or civil partners will be able to pass on up to 5 million pounds’ worth of farm assets between them, the statement said.

The government estimated that around 85% of estates claiming agricultural property relief in the 2026/27 year, including those that also claim for business property relief, will pay no more inheritance tax as a result of the changes.

The original announcement in 2024, which ended an exemption from inheritance tax for agricultural families from next year, triggered protests in London by tractor-driving farmers that have continued regularly.

The government had said the measure was intended to raise revenue to help pay for strained public services. Farmers warned it would destroy family farms and cut food production.