UK Farmers Demand Inheritance Tax U-Turn Before Budget
06 September 2026, UK: More than 100 Conservative members of parliament, Scottish and Welsh politicians and local councillors have written to Prime Minister Andy Burnham demanding he reverse changes to inheritance tax rules for farms before the government’s Budget on October 28, according to reporting by Farmers Weekly on September 4.
The letter renews pressure on the government over changes to Agricultural Property Relief (APR) and Business Property Relief (BPR), the two mechanisms that have historically allowed working farms to pass between generations largely free of inheritance tax. Since the reforms, relief above a set threshold has been reduced, and new figures compiled by farm organisations show the changes are already reshaping investment decisions across the sector.
According to data cited in the report, more than 6,300 agricultural businesses in England and Wales ceased trading in the year to July 2025. Separately, surveys found that 55 percent of businesses affected by the BPR changes and 49 percent of those affected by the APR changes had paused or cancelled planned investment. More than 60 percent of affected businesses expect to cut investment by more than a fifth, and nearly one in four family farms said they had already reduced staff numbers.
The government has set a combined relief threshold of £2.5 million and maintains that 85 percent of estates claiming Agricultural Property Relief will face no additional inheritance tax under the new rules. Ministers have also pointed to other support for the sector, including an extra £65 million announced for drought-hit farmers in England this year.
Political odds shifting
Jonathan Roberts, director of external affairs at the Country Land and Business Association (CLA), told Farmers Weekly that the political odds of a reversal have shifted markedly. He said the chance of a U-turn had moved from “zero six months ago” to roughly even. His comments reflect growing unease among Labour backbenchers in rural constituencies about the policy’s economic effects at the local level.
Other prominent voices have added to the pressure. Victoria Atkins, the shadow Secretary of State for the Department for Environment, Food and Rural Affairs (Defra), and Harriet Cross, a Scottish Conservative MP, are among the signatories pushing for change. Tom Bradshaw, president of the National Farmers’ Union (NFU), and Tim Bonner, chief executive of the Countryside Alliance, have both continued to campaign publicly against the tax changes, arguing they threaten the viability of family farms and the wider rural economy.
The dispute matters well beyond the farm gate. Agricultural Property Relief and Business Property Relief have long underpinned succession planning in British farming, allowing land, machinery and breeding stock to transfer between generations without forcing the sale of productive assets to cover a tax bill. Farm organisations argue that eroding this relief discourages long-term investment in the very assets, better soil, modern equipment, upgraded storage, that support future productivity and food security.
With the Budget just over seven weeks away, the government faces a decision that will be closely watched by farm groups, tax advisers and rural business owners across the country. A reversal, a partial concession, or a decision to hold the line will all carry consequences for confidence in the sector heading into the 2027 cropping and investment cycle.
Effect on input spending
Policy uncertainty of this kind also affects how quickly farm businesses commit to spending on the coming season’s inputs. Merchants and agronomists in the UK report that clients facing tax or succession uncertainty tend to delay decisions on capital items and, in some cases, trim variable input budgets until the picture becomes clearer, a pattern that ripples through demand for seed, crop protection and fertiliser well before any tax bill is actually due.
Policy stability around land ownership and succession is a leading indicator of capital spending on inputs. When UK farms defer investment because of tax uncertainty, that reduces near-term demand for seed, crop protection products, fertiliser and machinery, a pattern global input suppliers, including those exporting to or investing in the UK market from India and other regions, track closely when forecasting demand and planning market entry or expansion strategies. A resolved, predictable tax environment tends to support renewed capital spending on farm inputs and equipment.
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