Government Partially Reverses 20% Inheritance Tax on Farms Following Protests
The government has announced a partial U-turn on the 20% inheritance tax for farms, which is set to take effect from next April. This reversal will exempt about half of the affected farms from the tax.
The change follows sustained protests, including tractor convoys to Parliament Square, as well as diplomatic efforts by the National Farmers' Union (NFU) with Downing Street and the agriculture department. It has been clarified that while the NFU organised mass lobbies, they did not organise the noisy tractor protests.
More than 30 rural Labour MPs abstained during the inheritance tax vote to express concerns, with only one voting against the policy. Although the exact timing of the government's partial reversal remains unclear, ministers are reported to have had more positive conversations this month but were not informed beforehand.
Keir Starmer's recent appearance before the liaison committee, where he faced questioning from Cat Smith and Alistair Carmichael, is cited as a possible factor influencing the timing of the reversal. Downing Street aims to adopt a proactive stance in January to dispel the political cloud hanging over the policy.
The partial U-turn is expected to cost around £130 million, a small fraction of the roughly £900 billion in total annual taxation. This move reflects a familiar pattern where revenue-raising policies are followed by public backlash and subsequent partial reversals, with winter fuel payments, welfare reform, and farm inheritance tax serving as past examples.
