The government has confirmed there will be no further changes to its revised plans to increase inheritance tax on agricultural assets, drawing a line under months of protests and lobbying by farmers across the UK.
The announcement came after demonstrators attempted to disrupt a speech by the environment secretary at the Oxford Farming Conference, using tractors and horns to voice opposition to the policy.
Threshold Increase Final, Says Minister
Environment secretary Emma Reynolds told delegates that the recently announced rise in the tax threshold was final and would not be revisited.
She said the government had listened to constructive engagement from farmers but would not respond to protest tactics, adding that the revised policy would come into force in April as planned.
Policy Marks Climbdown From Original Budget Plan
The government originally announced the reform in the chancellor’s first budget in 2024, proposing a 20% inheritance tax on agricultural assets worth more than £1m. The move was expected to raise more than £500m a year by the end of the decade.
After sustained opposition from the farming sector, ministers raised the threshold to £2.5m last month. With an existing spousal exemption, farming couples will now be able to pass on up to £5m in qualifying assets without paying inheritance tax.
Government Defends Aim of Reform
Ministers have argued that the policy is designed to protect family farms while preventing wealthy investors from using farmland as a tax shelter.
Reynolds said the revised threshold reflected feedback from the sector and struck a balance between fairness and fiscal responsibility.
Farming Groups Remain Divided
Despite the increase, major farming organisations said they would continue campaigning against the tax.
The Country Land and Business Association described the change as a partial climbdown but said the policy remained damaging to rural economies. The National Farmers’ Union said it opposed the tax in principle but acknowledged the threshold increase had eased pressure on many family farms.
Assurance on Environmental Payments
Alongside the inheritance tax announcement, the environment secretary pledged there would be no repeat of sudden closures to farm payment schemes, following criticism over last year’s suspension of the Sustainable Farming Incentive.
The scheme, which rewards farmers in England for environmental measures such as wildlife protection and soil management, was abruptly closed in March after funding was fully allocated.
New Farming Scheme Timetable Set Out
Reynolds said a reformed version of the Sustainable Farming Incentive would be simpler and more predictable. Applications will open in June for small farms and those not currently in a scheme, with a second, wider window opening in September.
She acknowledged mistakes in the previous rollout and said the new system would be more stable, while still linking farm support to environmental outcomes.
Sector Still Under Pressure Post-Brexit
The reforms come as UK farmers continue to adjust to the post-Brexit subsidy system, rising input costs and ongoing uncertainty over long-term funding.
A recent government-commissioned review warned that many farmers remain anxious about profitability, inheritance tax and environmental payment changes, with confidence in the sector still fragile.
