Farmers Celebrate Sir Keir Starmer's Christmas U-turn on Inheritance Tax
On 23 December 2025, the government announced an increase in inheritance tax (IHT) relief for family farms, raising the threshold from £1 million to £2.5 million for individuals, and up to £5 million for couples. This decision, described as a Christmas U-turn, followed a personal intervention by the prime minister and was revealed by Environment Secretary Emma Reynolds, who stated that the government had listened to farmers and aimed to protect ordinary family farms.
The change reverses earlier budget proposals by Labour's Rachel Reeves from the previous year, which had suggested altering farm reliefs. The announcement came against the backdrop of a December Commons mini-rebellion, where around 30 Labour MPs abstained on the measure, one MP, Markus Campbell-Savours, voted against it, and the Labour whip was withdrawn.
Reactions to the U-turn varied: Conservative politicians like Kemi Badenoch called it a significant victory for their campaign against Labour's family farm tax policies, while Victoria Atkins described it as only a partial U-turn and noted it was too late for some farmers. The National Farmers Union (NFU), led by president Tom Bradshaw who cited two constructive meetings with the prime minister as key to the change, warmly welcomed the climbdown, stating it would greatly reduce the tax burden on many family farms. The NFU had previously criticized prior changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) as shocking.
Prior to the announcement, farming opposition had been clearly demonstrated through NFU-led protests, including tractors blocking Whitehall and Westminster, underscoring the intensity of farmer dissatisfaction that contributed to the policy reversal.
