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Labour U-turns on farmer inheritance tax after tractor protests

The threshold rise from £1 million to £2.5 million means 85% of farms will avoid inheritance tax from April 2026, easing financial pressure on family farms.

  • On Tuesday, the UK Government announced that Defra will increase the inheritance tax threshold on farms from £1 million to £2.5 million in April 2026.
  • Following sustained tractor convoys and lobbying, 14 months of campaigning by the National Farmers’ Union and farmer campaigners, plus more than 250,000 petition signatories, pressured ministers to rethink the tax.
  • Under the revised rules, the number of estates affected will fall from around 2,000 to about 1,100, and agricultural estates from 375 to 185, with a 50% relief and a reduced tax rate up to 20%.
  • NFU leaders welcomed the change as a huge relief after 14 months of campaigning, while Gavin Lane, President of the CLA, and Conservative leader Kemi Badenoch urged further tax scrapping.
  • An amendment to the Finance Bill will be tabled in January to implement the change, with only 185 agricultural estates forecast to pay more inheritance tax next year under revised rules.
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GOV.UK broke the news in United Kingdom on Tuesday, December 23, 2025.
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