Published by Global Banking & Finance Review®
Posted on December 23, 2025
2 min readLast updated: January 20, 2026
Add as preferred source on GoogleThe UK government has revised its farm tax policy, increasing the inheritance tax relief threshold to £2.5 million, following protests by farmers.
LONDON, Dec 23 (Reuters) - Britain said on Tuesday it would scale back its plan to raise more tax from farmers and agricultural businesses which have led to protests since it was announced by the Labour Party government in 2024.
A threshold for individual inheritance tax relief will rise to 2.5 million pounds ($3.4 million) from 1 million pounds from April, significantly reducing the number of farms and business owners facing higher inheritance tax bills, the government said.
"We have listened closely to farmers across the country and we are making changes today to protect more ordinary family farms," Environment Secretary Emma Reynolds said in a statement.
The higher threshold for 100% relief - with 50% relief applying to assets above the new level - means that spouses or civil partners will be able to pass on up to 5.7 million pounds worth of farm assets between them, the statement said.
Around 85% of estates claiming agricultural property relief in the 2026/27 year, including those that also claim for business property relief, are forecast to pay no more inheritance tax as a result of the changes, it said.
The announcement in 2024 by the government of Prime Minister Keir Starmer that it would end an exemption from inheritance tax for agricultural families triggered protests in London by tractor-driving farmers that have continued on a regular basis.
The government had said the change is part of its programme to raise more tax revenues to help pay for strained public services. Farmers said it would destroy family farms and reduce food production.
($1 = 0.7402 pounds)
(Reporting by Muvija M; Editing by Kate Holton)
Inheritance tax is a tax on the estate of someone who has died. It is charged on the value of the estate above a certain threshold.
Agricultural property relief is a relief from inheritance tax that allows certain agricultural properties to be passed on without incurring tax.
Tax thresholds determine the amount of income or value that is exempt from taxation. Changes in thresholds can significantly affect tax liabilities.
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