Asda has called on ministers to suspend the so-called “family farming tax” as farmers warn inheritance changes could make it harder to pass on their land to the next generation.
The supermarket giant said the government should postpone implementing the policy and reconsider its approach after “working with farmers and listening carefully to their concerns”.
The reforms have raised concerns that some family farms, particularly land-rich but cash-poor companies, may be forced to sell land and assets to avoid inheritance tax.
Asda, one of Britain’s biggest grocery retailers, said the proposals could have a long-term impact on the farming businesses that supply its stores.
The agenda centers on changes to the agricultural and business property relief system, which help protect farms from inheritance tax when estates are passed on.
In December, ministers amended the plan to increase the value of eligible assets that can be transferred before inheritance tax applies.
The latest measures increase the relief threshold to £2.5m, allowing spouses or civil partners to inherit up to £5m of agricultural or business property.
Despite these changes, Asda said the reforms still risked unintended consequences for multi-generational family farming.
The retailer said: “Our overall position remains unchanged. We support a complete suspension of agricultural property relief to allow for in-depth consultation on this issue and its implications.”
Industry groups have also expressed concern. The NFU has repeatedly warned that the measures could undermine succession planning and put further pressure on farmers already facing rising costs.
The House of Lords has also stepped up its scrutiny after the Economic Affairs Committee’s Finance Bill Subcommittee published its recommendations last month.
Peers are calling for an extension to the tax deadline, saying estates should be given more time to meet their inheritance tax obligations.
They also proposed safeguards to prevent interest from being applied if a personal representative fails to meet a deadline due to circumstances beyond its control.
The commission said clearer guidance and stronger support were essential, especially for rural businesses dealing with complex agricultural land.
Lord Liddle, chairman of the sub-committee, said: “I am pleased that the Government has changed these measures in the 2025 Budget, but there is still significant work to do to make them effective in practice.”
He added that his peers were particularly concerned about the strain it would place on those managing properties “in this time of grief.”
Lord Liddle also criticized the lack of early engagement, saying the government’s “failure to listen to stakeholder concerns at an early stage” led to delays in amendments and “inevitable uncertainty and costs”.
The committee said the government must closely monitor the long-term impact of reforms on agriculture and rural business and be prepared to make further changes if necessary.
Ministers have not yet indicated whether they will postpone the policy again, but pressure continues to mount as the Finance Bill moves through Parliament.
