Ministers raise inheritance tax threshold for farms after backlash

The Guardian - World NewsEN 4 min read 100% complete by Eleni Courea Political correspondentDecember 23, 2025 at 06:38 PM

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Faced with significant backlash, the government has reversed course on its plan to tax inherited farmland, raising the threshold from £1 million to £2.5 million. The initial plan, announced last year, would have taxed agricultural assets above £1 million at 20%, aiming to generate £520 million annually. Farmers and rural MPs protested, arguing the tax would prevent farm transfers to future generations. The reversal, effective in April, follows lobbying efforts by Labour MPs who presented evidence to ministers and Keir Starmer. The government stated the change addresses concerns from the farming community, with officials estimating that 85% of farms will now be exempt from the levy.

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Key Player Opposition Context

Callum Anderson 30% Alistair Strathern 30% Helena Dollimore 30% Andrew Pakes 30% Laura Kyrke-Smith 30% Markus Campbell-Savours 40% Jon Pearce 40% Rachel Reeves 50% Keir Starmer ×280%

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inheritance tax 100% farmland 90% tax threshold 80% farming community 70% rural areas 60% tax relief 50% budget 40% mps 40%

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