I welcome the Government’s decision to reverse its plan to cap Agricultural Property Relief at £1 million and to raise the threshold to £2.5 million per person from 2026. When the original plan was brought forward, it was clear it would have negative consequences for family farms.
I’ve been worried about small farmers for a long time. Earlier this year I joined other MPs in writing to supermarket CEOs because some buying practices were leaving farmers with very low returns.
I want to see working family farms kept intact. Families should be able to carry on farming without being pushed into selling land or taking on debt to keep the farm going or pass it on to the next generation. The original proposal would have made that harder because the lower cap on relief could have created those pressures for many farms.
Family farms often look valuable because of the land, yet many run on tight incomes. A £1 million cap on Agricultural Property Relief could have forced some to sell land even while the farm was still operating.
The impact would not have stopped at the point of inheritance. Families plan years ahead, so uncertainty about the future tax bill affects everyday decisions. If they could not predict that bill, they would have held back on buying equipment, improving buildings or taking on new land.
That uncertainty could have put viable family farms at risk.
The only estates that still lose relief are the very largest commercial holdings. These multi‑million‑pound arable estates are owned by companies, investment vehicles and large landowning businesses, not family farmers.
The NFU says the higher threshold will reduce the tax paid by many family farms, and local farmers told the Eastern Daily Press they feel more confident about planning for the future. I’m really glad to hear that.