Yet Another U-Turn As Labour Backs Down Over Farmers' Inheritance Tax |
A tractor is pictured in Westminster during a protest by farmers on the day of the second Budget statement by UK Chancellor of the Exchequer Rachel Reeves on 26th November 2025 in London, United Kingdom.
The government has U-turned on its plans to launch an inheritance tax raid on farmers.
After months of intense backlash and protests in Westminster, Labour has increased the threshold – the point at which inhertance tax would apply on large farm estates – from land worth £1 million to those worth £2.5 million when it is introduced in April.
The new plan will also permit spouses to pass on £5 million of assets between them before they have to pay the inheritance tax.
This means the total number of estates impacted will drop from 375 to 185 – and the U-turn could cost around £130 million.
It comes after prime minister Keir Starmertold a Commons committee hearing last week that he had been told of farmers with terminal illnesses who were planning to kill themselves before the new rules came in to avoid the tax.
Environment secretary Emma Reynolds claimed the government’s change of heart came about after listening to those within the agriculture community.
She said: “Farmers are at the heart of our........