Asda calls for pause on farm inheritance tax reforms

Asda has urged ministers to suspend the so-called “family farm tax”, as farmers warn inheritance changes could make it harder to pass land on to the next generation.

The supermarket giant said the government should hold off on implementing the policy and reconsider its approach after “engaging with farmers and listening carefully to their concerns”.

The reforms have sparked fears that some family farms could be forced to sell land or assets to meet inheritance tax bills, particularly in businesses that are land-rich but cash-poor.

As one of the UK’s largest grocery retailers, Asda said the proposals could have long-term implications for the farming businesses that supply its stores.

The row centres on changes to Agricultural and Business Property Relief, which help protect farms from inheritance tax when estates are passed on.

In December, ministers revised the plans, increasing the value of qualifying assets that can be transferred before inheritance tax applies.

Under the updated measures, the relief threshold was lifted to £2.5m, allowing spouses or civil partners to pass on up to £5m in agricultural or business property.

Despite that shift, Asda said the reforms still risk unintended consequences for multi-generational family farms.

The retailer said its “overall position has not changed – we support a full pausing of Agricultural Property Relief to allow for an in-depth consultation on the issue and its impacts”.

Industry groups have also raised concerns. The NFU has repeatedly warned that the measures could undermine succession planning and place additional pressure on farming families already facing rising costs.

The House of Lords has also added to the scrutiny, after the Finance Bill Sub-Committee of the Economic Affairs Committee published recommendations last month.

Peers said estates should be given more time to meet inheritance tax obligations, calling for the payment deadline to be extended.

They also proposed safeguards to prevent interest charges being applied where personal representatives miss deadlines through circumstances beyond their control.

The committee said clearer guidance and stronger support would be essential, particularly for rural businesses dealing with complex farm estates.

Lord Liddle, chair of the sub-committee, said: “We were pleased to see the changes the government made to these measures at budget 2025, but significant work remains to ensure that they work in practice.”

He added that peers were especially concerned about the burden placed on those managing estates “at a time of grief”.

Lord Liddle also criticised the lack of early engagement, saying the government had “failed to listen to the concerns of stakeholders early on”, leading to late revisions and “avoidable anxiety and costs”.

The committee said the government must closely monitor the long-term impact of the reforms on farms and rural businesses, and be prepared to make further changes if necessary.

Ministers have not yet indicated whether they will delay the policy again, but pressure is continuing to grow as the Finance Bill moves through Parliament.