The plan to scrap inheritance tax relief for farms valued over £1m had provoked fury among farming families who were suddenly left facing a 20pc tax when handing land and assets to the next generation.

But ministers have now decided to raise that threshold to £2.5m, with the allowance transferrable between spouses or civil partners, meaning farming couples will be able to pass on up to £5m in qualifying agricultural or business assets before inheritance tax is applied.

Chancellor Rachel Reeves had previously resisted mounting industry pressure for a U-turn - although she did announce a small concession at last month's Budget, allowing the original £1m allowance to be transferred between spouses.

After the raised tax relief threshold was announced, Defra's environment secretary Emma Reynolds said: ”We have listened closely to farmers across the country and we are making changes today to protect more........

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