Chancellor Rachel Reeves’ autumn budget has sparked fierce criticism across the farming industry, despite a late concession allowing the £1 million family farm tax threshold to be transferred between spouses.
The change means that when a married farmer dies, they no longer need to leave £1 million of agricultural assets directly to their children to use their agricultural property relief (APR).
Instead, their spouse can inherit the assets and later combine both their own £1m allowance and their deceased partner’s to pass on up to £2m of agricultural assets when they die.
The Treasury says the adjustment will ease the impact on some families, but farming leaders warn it will help only a fraction of those affected.
NFU President Tom Bradshaw said the shift amounted to recognition that the policy had been flawed from the outset. “Today the government accepted its changes to inheritance tax are flawed; which we welcome.
"But this step does not do nearly enough to reduce the damage to the British farming community. The acute and cruel impact on the elderly remains. We keep fighting.”
He thanked farmers, backbench MPs and the public for pressing the government to rethink its position, saying the union would continue to push for “meaningful changes to this unfair and destructive tax.”
Scottish Conservative MP Harriet Cross, who joined farmers protesting in London ahead of the budget announcement today (26 November), said the chancellor’s statement marked “another dark day” for the sector.
She accused ministers of “putting the industry through hell” and said the adjustment fell far short of reversing the damage caused by Labour’s forthcoming inheritance tax changes.
Cross said: “Rachel Reeves had the chance to fix the damage that Labour have caused, but instead she has sold out the industry which could signal the end for rural businesses.
"The chancellor’s decision not to axe this tax will change the future of family farming forever – not for the better – but for worse.” She added that the industry was facing one of its toughest periods “in living memory” and vowed to fight the reforms “to the very end.”
Specialists advising family-run farms say that while the spousal transfer eases one technical issue, it does little to soften the wider impact of the reforms.
Matthew Braithwaite, partner in the private client team at Wedlake Bell, said: “We would have welcomed rowing back on the APR / BPR reforms, but in announcing the ability to transfer the £1m allowance between spouses, the chancellor has shown she is committed to the reforms albeit with this minor concession.
"This will be a relief for business owners and farmers who own their assets jointly with their spouses as it removes unnecessary complications and aligns the treatment of asset transfers between spouses in the context of other taxes.”
Sean McCann, chartered financial planner at NFU Mutual, also warned that many families will still face serious consequences. He said: “The decision not to amend the proposals is a missed opportunity for the government and a major blow to family-owned farms and businesses across the UK.
"However the decision to allow the £1m agricultural / business property allowance to be transferred between spouses will help some farming and business owning families.”
McCann cautioned that the reforms could have damaging long-term impacts on farm structure and succession. “Although farm asset values can be high, the returns are often low.
"In many cases we could see land and buildings having to be sold on the farmer’s death to pay the tax bill with the next generation inheriting smaller less efficient farms as a result.”
Property and land expert Simon Gooderham, managing partner at Cheffins, echoed those concerns, warning that the policy had “created worrying times for the entire agricultural community,” particularly as farmers already face the loss of Basic Payment Scheme income and reduced funding from subsidies and environmental schemes. He predicted further sales of farmland as families attempt to prepare for significant future tax liabilities.
He added that the government’s approach to IHT risks long-term structural damage: “A number of active farms will be swallowed up within the next generation, creating a bleak future for many family farms and rural communities.” He urged farm businesses to seek advice to navigate what he called a “disastrous policy.”
With the new system due to take effect in April 2026, the farming sector is braced for further fallout — and a renewed fight for deeper reform.
