Burnham urged to reverse farm inheritance tax at autumn budget

Prime Minister Andy Burnham is facing fresh pressure from farm leaders to reverse inheritance tax changes at the upcoming autumn budget.

The budget will be delivered on Wednesday 28 October, giving the government a clear opportunity to revisit the rules.

The Ulster Farmers’ Union (UFU) says the prime minister should honour his pre-election pledge to “look again” at changes to agricultural property relief (APR) and business property relief (BPR).

The union argues that the remaining liability continues to create uncertainty over succession and investment for some family farms.

Before the Makerfield by-election, Burnham acknowledged concerns surrounding the inheritance tax proposals and committed to revisiting the issue if he became prime minister.

UFU president John McLenaghan said: “Before becoming prime minister, Andy Burnham recognised the devastating impact that the measures would have on family farms and committed to looking again at agricultural property relief and business property relief. Now it’s time to follow through on that commitment.”

The inheritance tax reforms took effect on 6 April 2026.

Under the rules, a £2.5 million allowance applies to qualifying agricultural and business property receiving 100% relief, with 50% relief applying above that threshold.

Unused allowance can be transferred between spouses or civil partners, meaning couples can potentially pass on up to £5 million of qualifying agricultural and business assets before the reduced relief applies, alongside other inheritance tax allowances.

The reforms were originally proposed with a £1 million threshold before this was increased to £2.5 million following pressure from farming and business groups.

The UFU welcomed that change as a step in the right direction, but maintains it has not removed uncertainty for all farming families.

The government has argued that the reforms require larger estates to make a greater contribution while protecting the majority of family farms.

Official estimates suggest up to 185 estates claiming APR, including some also claiming BPR, will pay more inheritance tax in 2026/27, while around 85% are expected to face no additional liability as a result of the changes.

The UFU says the remaining exposure could still influence succession decisions and farmers’ confidence to invest in their businesses.

Pressure for a rethink is also coming from other rural organisations.

Country Land and Business Association (CLA) president Gavin Lane has said the change in prime minister should mark “the beginning of a rural reset”, arguing that reversing the inheritance tax changes is central to restoring confidence and investment across the countryside.

He said: “Only a full reversal will unlock the confidence and investment needed to realise the full potential of the rural economy.”

The Countryside Alliance has also called for a change of direction, saying the inheritance tax policy has caused “untold pain and anxiety for farmers”.

The UFU has welcomed recent comments from Burnham acknowledging that the government has more work to do to rebuild trust with farming families and stressing the importance of domestic food production.

But it says those comments now need to be matched by action.

McLenaghan said: “We hope the prime minister will honour his commitment to re-look at the proposals and the government must use the autumn budget, or tax measures before, to deliver a policy that protects the future of family farms and gives the next generation confidence to invest in the industry.”