Government Reverses Inheritance Tax Changes, Raising Relief Threshold for Family Farms
The government has raised the inheritance tax (IHT) relief threshold for family farms from £1 million to £2.5 million, and estates valued up to £5 million are now exempt from inheritance tax. This revision overturns last year's Agricultural Property Relief (APR) and Business Property Relief (BPR) changes. The climbdown followed a personal intervention by the prime minister and was announced by Environment Secretary Emma Reynolds, who said the government had listened to farmers.
The National Farmers' Union (NFU) welcomed the decision, stating it will greatly reduce the tax burden on many family farms. This announcement came after protests, including a demonstration featuring dozens of tractors in Westminster as part of farming collective action against the original tax changes.
Political reactions included Kemi Badenoch describing the reversal as a huge U-turn and a Conservative win, while the shadow environment secretary Victoria Atkins called it only a partial U-turn. Earlier in December, about 30 Labour MPs abstained on the proposal, with Markus Campbell-Savours voting against it and consequently losing the Labour whip.
