The National Farmers’ Union (NFU) has called the change to the inheritance tax (IHT) threshold a “huge relief to many” after lobbying for changes to the legislation since its announcement in October 2024.
Government has announced that the level of the Agricultural and Business Property Reliefs threshold will be increased from £1 million to £2.5 million when it is introduced in April.
It highlighted that the change would allow spouses or civil partners to pass on up to £5 million in qualifying agricultural or business assets between them before paying inheritance tax, on top of existing allowances.
The change will be introduced to the Finance Bill in January and will apply from 6th April, and Government claimed that the change would halve the number of estates claiming Agricultural Property Relief (including those also claiming Business Property Relief) that are affected by the reforms.
Responding to the news that the inheritance tax threshold will be raised to £2.5 million, NFU president Tom Bradshaw commented: “We have spent the past 14 months campaigning and lobbying to try to mitigate the worst impacts of the proposals.
“After it became clear that this policy wasn’t going anywhere, we have focused our campaign to mitigate the worst of its impacts for the majority. Today’s announcement, which sees the tax threshold raised from £1 million to £2.5 million, will come as a huge relief to many. While there is still tax to pay, this will greatly reduce that tax burden for many family farms, those working people of the countryside.
“Changes to Agriculture Property Relief (APR) and Business Property Relief (BPR) announced in last year’s Budget came as a huge shock to the farming community. Until that moment, the best tax planning advice was to hold on to your farm until death and pass it on to the next generation who could continue to run a viable farming, food producing business.
“The original changes to APR and BPR, contained within the Finance Bill, resulted in a pernicious and cruel tax, trapping the most elderly and vulnerable people and their families in the eye of the storm. The NFU and its members have stood strong for what we believed in.”
“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.”
Tom Bradshaw, NFU
Bradshaw continued: “I am thankful common sense has prevailed and Government has listened. I have had two very constructive meetings with Prime Minister Sir Keir Starmer and dozens of conversations with Defra Secretary of State Emma Reynolds. She has played a key role underlining the human impact of this tax. These conversations have led to today’s changes which were so desperately needed.
“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. I’d like to thank the Prime Minister for recognising the policy needed amending and the Chancellor for bringing in the spousal transfer in the Budget. Combined this is a significant change.
“I am immensely proud of all those farmers and growers who have worked with the NFU and supported our campaign. We have stood together and supported one another when it really mattered. In the end, it was well-reasoned and rational argument that won through.
“I would like to thank all those Labour backbench MPs that were contacted by farmers and growers and decided to stand by their constituents as demonstrated by the recent abstentions on the vote on Budget Resolution 50. While small in number, it was a significant and brave move for many.”
“More than 270,000 people supported our calls for change because they value British food and the working people of the countryside that produce it.”
Tom Bradshaw, NFU
Bradshaw stated: “We have spent the past year working with them and there’s no doubt their interventions behind the scenes have also played a huge role in securing today’s news. I would also like to thank all opposition parties for continuously raising the impacts of this proposed policy.
“Finally, I would like to thank the public for supporting our campaign. More than 270,000 people supported our calls for change because they value British food and the working people of the countryside that produce it.
“It has been a very challenging year for many, but I hope we close 2025 with optimism for the future and an ability to work in partnership with all departments across Government to see British farming thrive.”
NFU Scotland responds
President of the National Farmers’ Union Scotland, Andrew Connon, commented: “Today’s announcement is a significant day for the future of Scottish agriculture. The changes set out by the UK Government is a victory for common sense and reflects 14 months of relentless lobbying from NFU Scotland and the other UK Farming Unions in our pursuit to mitigate the worst of the impacts of the policy and protect our family farms.
“This announcement, which sees the tax threshold raised from £1 million to £2.5 million per spouse, will come as a huge relief to many. While there is still tax to pay, this will greatly reduce that tax burden for many family farms, those working people of the countryside.
“The original proposed changes to Agriculture Property Relief and Business Property Relief announced in last year’s budget came as a huge shock to the farming community and represented one of the biggest generational risks to the future viability of family farms, domestic food production, and Scotland’s farming industry. Whilst the changes set out today still means there will be taxation implications for farming families in the future, the increase to the thresholds and associated reliefs do provide a comfort blanket to many Scottish farming businesses.”
“I am incredibly grateful to all our members for their unwavering support during the past 14 months.”
Andrew Connon, NFU Scotland
Connon said: “This has been a monumental effort from the entire team at NFU Scotland, including from thousands of members the length and breadth of the country who have shown incredible resilience, strength, and solidarity in response to the original ill-conceived proposals. I am incredibly grateful to all our members for their unwavering support during the past 14 months, during which time they have got involved in lobbying, rallies, and direct engagement with the public to raise awareness of our campaign.
“I am also grateful to those many Scottish politicians who have supported our campaign directly and those who have engaged and listened to our pleas for common sense to prevail. A particular thanks must go to Alistair Carmichael MP, the chair of the EFRA Committee, for his guidance and support throughout the entire campaign.
“The last 14 months has been emotional and draining for many people, but today’s announcement will be cause for small celebration across the farming industry in Scotland. There are no doubt still tough times ahead for our farmers and crofters as we continue to navigate many wider challenges, but NFU Scotland remains hugely optimistic for the future and today’s announcement has increased that belief further.”
LMC calls change a “positive step”
Commenting following the announcement by Government, Colin Smith, chief executive of the Livestock and Meat Commission (LMC) said: “Confirmation that the Agricultural and Business Property Reliefs threshold will be increased from £1 million to £2.5 million when it is introduced in April 2026, will come as welcome news to farming families across Northern Ireland (NI). The anguish that this policy has created within the farming community has been widely publicised. Family farms are the part of the fabric of NI, making significant contributions to the economy, environment and society. It is imperative that they are safeguarded and allowed to prosper for generations to come.
“While it is unfortunate that this tax will still exist, raising the threshold is a positive step which will reduce the burden on farm families. This change has come about thanks to the sustained and collective efforts of farmers, farming lobby groups and politicians who relentlessly emphasised the detrimental impact this policy would have on farm businesses and ultimately livelihoods. This was one of the major challenges characterising 2025 and locally I recognise the significant efforts of the Ulster Farmers’ Union in campaigning for this change.”
