NFU Cymru hails tax shift as farming faces year of political change

Political change and new farming schemes will shape the future of agriculture in the year ahead

Family farms are heading into a year of major political change with greater certainty over their future, after inheritance tax reforms eased pressure on the sector, NFU Cymru president Aled Jones has said.

In his New Year message, Jones said 2025 had ended “with a sense of relief for many family farms” following the UK government’s decision to raise the threshold for agricultural property relief and business property relief from £1 million to £2.5 million.

Combined with changes allowing spousal transfer, he said the reforms would mean “for many up to £5m in qualifying agricultural or business assets will be able to be passed on to the next generation before paying inheritance tax”.

Jones said the change followed more than a year of sustained campaigning by NFU Cymru to amend the original proposals, which had sparked widespread concern across the farming sector.

He pointed to high-profile lobbying efforts, including a petition backed by more than 270,000 people and the “NO IHT” mosaic display unveiled at the Royal Welsh Winter Fair on the eve of the Autumn Budget.

Describing the announcement as a turning point, he said the government’s decision would be “welcome news to Welsh family farms”, adding that it had been “a crucial change for many, ensuring that the year would end not on the backfoot but with a clearer path ahead as families come together to welcome the new year”.

Looking ahead, Jones said attention would now turn to the Wales' Sustainable Farming Scheme, which is due to launch on 1 January 2026. He said the publication of guidance documents in recent days marked a significant step for a scheme that has been eight years in the making and will shape how farmers are supported in the years ahead.

He said NFU Cymru’s engagement with Welsh government had already delivered important changes since the scheme’s initial proposals were published in 2018. Over the past 18 months, discussions through roundtables and sub-groups had helped secure the removal of the proposed 10% tree cover requirement and a reduction in the number of universal actions from 17 to 12.

Jones also highlighted the decision to maintain the farming budget at £340 million and the introduction of a social value payment within the universal layer of the scheme. He said this recognised the wider contribution Welsh farming makes to society and would provide “much needed stability to our family farms”.

While supportive of the overall framework of the SFS, he warned that further progress was essential. His message to both the current and next Welsh governments, he said, was that there must be “a commitment to continue to evolve the scheme so that it can support a productive, progressive and profitable farming sector in Wales”.

Jones said 2026 would also be a pivotal year politically, with the Senedd expanding to 96 members elected from 16 new constituencies under a new voting system.

He pointed to NFU Cymru’s manifesto, Welsh Farming: Growing Forward, which sets out priorities for the next government, including a farm-to-fork food strategy, a ring-fenced multi-annual farming budget and a comprehensive approach to tackling bovine TB.

Reflecting on the past year, he said the industry had faced difficult conversations over inheritance tax, uncertainty around the SFS, the threat of animal disease and challenging weather conditions.

He also criticised the four-yearly review of the Control of Agricultural Pollution Regulations, saying it failed to reflect the “sheer desperation of farmers in Wales in grappling with the impracticality and complexity of the Regulations”.

Despite those pressures, Jones said he remained encouraged by what he saw across the country, praising “the ambition and ‘can do’ attitude of our farming families and their desire to feed the nation whilst striving to leave the farm in a better place for the next generation to take the reins”.

As the UK enters a period of political change, Jones urged politicians from all parties to work with the farming sector to deliver the right policy and regulatory environment.

He said this was essential to ensure farming families could continue “producing world leading healthy and nutritious food whilst delivering for our environment, climate, economy our culture and language”.