UK Raises Farmer Inheritance Tax Threshold

The United Kingdom government has announced a significant U-turn on its inheritance tax policy for farmers, raising the relief threshold from £1 million to £2.5 million. This decision follows months of protests and criticism from the farming community, led by organizations like the National Farmers Union, and some United Kingdom — Labour Party MPs. The original proposals, unveiled in United Kingdom — Labour Party's first Budget, aimed to introduce inheritance tax on agricultural and business assets above £1 million, which farmers previously did not pay. Environment Secretary Emma Reynolds stated that the government 'listened closely to farmers' and made changes to protect more ordinary family farms. The new threshold, effective in April, will allow spouses or civil partners to pass on up to £5 million in qualifying assets tax-free, with a 50% relief applying to assets above that level. This change is expected to reduce the number of estates facing higher inheritance tax bills from 2,000 to 1,100, primarily affecting only the largest farms. National Farmers Union president Tom Bradshaw welcomed the announcement as a 'huge relief', while Tory leader Kemi Badenoch called it a 'huge U-turn' and the United Kingdom — Liberal Democrats urged for the tax to be scrapped entirely.