NI farm families 'in a better place' after inheritance tax plan climbdown

Farmers in Northern Ireland "never gave up hope" that the government would move on its proposals around inheritance tax.

William Irvine, the president of the Ulster Farmers Union, has welcomed a move by the government to increase the threshold from from £1m to £2.5m.

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.

Mr Irvine said the news "eases pressure on family farms" but he said that "it is not where we want to see the final position to be".

Mr Irvine told BBC News NI that "farm families are in a better place today than they were this time yesterday as a result of this announcement".

He said that whilst there had not been "time to crunch the numbers yet", he estimated that "between 80 and 90% of Northern Ireland farms should be significantly, if not totally, covered" by the new threshold.

The move is a "step in the right direction," he said.

It "gives people the confidence to invest in their farms for the future" and "gives younger generations the confidence to enter the industry," he added.

Whilst £5m is a lot of money, Mr Irvine told BBC News NI that in farming terms, it is a "very average farm" and that there are many farm families with £5m holdings "struggling to get living wage out of it".

He said "the old adage of asset rich and cash poor absolutely applies to farming" as land, stock and farming kit is extremely valuable.

Speaking on Evening Extra on Radio Ulster, Agriculture Minister Andrew Muir welcomed the announcement saying that it is "significant and important" but was "long overdue".

The minister commended the UFU on their "respectful, sustained and successful engagement with the UK government".

He said that there had been "a lot of anxiety and worry amongst the farming community in Northern Ireland" since the inheritance tax proposal.

He said his department found that the original proposal would have had "a disproportionate and detrimental impact on Northern Ireland" because of the family farms here.

Muir added that he was conscious that the move would not apply to everyone in NI and that this "announcement won't resolve everything" but it is a "welcome achievement".

Muir said it is really important that the government reflects on what has happened.

H said he was concerned by the government's "lack of empathy" and "lack of listening" but that it is "good that they've done this now".

"Lets learn lessons" and "ensure this never occurs again," he continued.

But he hopes that today will provide some reassurance.

"It's taken so long for them to realise the impact of this and to roll back.

"I think the UK government need to come clean in terms of recognising the mistake that they've made in this.

"Politics sometimes is about saying look we got this wrong and we are going to fix it," he said.

Muir said he thinks the government should acknowledge that this situation should have never occurred.

But that "this move allows us to protect the family farms".

Mr Irvine said the last 14 months had been very stressful and "could absolutely have been avoided" if the government had listened and talked to the agricultural industry at an earlier stage.

Going forward, Mr Irvine said he would like to see "a sensible discussion" about how inheritance tax should be handled long term.

The Chair of Stormont's Agriculture, Environment and Rural Affairs committee Robbie Butler welcomed the climb down but said it needs to be "removed totally".

"This has been a long held, deep-seeded concern which was really impacting the mental health of farm families right across Northern Ireland," he said.

Colin Smith, chief executive of The Livestock and Meat Commission, said the announcement was a "positive step which will reduce the burden on farm families".

"The anguish that this policy has created within the farming community has been widely publicised," he added.

"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."