Farmers' relief over inheritance tax climbdown

A farmer has welcomed the government's decision to dilute its proposals to tax inherited farmland with the threshold increasing from £1m to £2.5m but said it must go further.

The change announced on Tuesday followed months of protests by farmers and farming groups and concern from MPs.

Dan Willis, who runs Rookery Farms near Newbury, Berkshire, said a potential tax bill could still make running the family-owned farm unviable.

Environment secretary Emma Reynolds said the government had "listened closely to farmers across the country" and the changes were made "to protect more ordinary family farms."

Mr Willis said the change was a "step in the right direction" but that he could still face a £650,000 inheritance tax bill on his 2,000-acre farm on the death of his mother, who co-owns it. The farm has been in his family for five generations.

"I think [the family has] more than bought and paid for the land and we've certainly worked the land. It just seems wrong," he said.

"Yes [the change] is a help but on 2,000 acres we made £18,000 last year. If you look at it like that, with a tax bill of circa £65,000 a year to pay for 10 years on the passing of my mother, I can't do it.

"We're price takers; we can't put the prices up to increase our profits."

At last year's Budget, ministers said they would start imposing a 20% tax on inherited agricultural assets worth more than £1m from April 2026, ending the 100% tax relief that had been in place since the 1980s.

Colin Rayner, who has been farming in Berkshire since the 1970s, said he "rejoiced" at the change because of the toll on some farmers' mental health.

He added that Berkshire residents had "warmly welcomed" farmers at recent protests.

"I felt like a rockstar at times. In the past we weren't loved and the politicians told us we weren't loved but the public of Berkshire do love us," he added.

"We've got a long way to go. Hopefully [the change] might mean that my daughters might be able to inherit some of the farm without having an enormous tax bill."

Olly Glover, Liberal Democrat MP for Didcot and Wantage, said it was "about time" the government changed its policy.

"They have expended a huge amount of political capital on this," he said.

"For ages they were adamant that they wouldn't change and they have. It's caused all this uncertainty for absolutely no benefit at all."