The Government faces a growing backlash from rural Wales over its inheritance tax reform proposals, as NFU Cymru backs cross-party demands from MPs to postpone the so-called ‘family farming tax’.
The House of Commons Welsh Affairs Committee has published its latest report, Agriculture in Wales in 2025: Challenges and Opportunities, following a months-long investigation that heard oral and written evidence from farming organizations.
Among its key recommendations is that the Government should postpone changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) until a full impact assessment has been completed and considered by the Committee.
The government is facing growing anger across the farmer community. More than 12,000 people have written to their MPs and farmers are planning a major tractor protest in London ahead of the Prime Minister’s Autumn Budget.
The proposed policy would cap inheritance tax relief on agricultural and business properties at £1 million, with only 50% relief for assets above that threshold.
Industry leaders have warned that this will force many families to sell their land or demolish their old farms to pay hefty taxes, a move they say could destroy rural economies and generations of traditions.
NFU Cymru chairman Aled Jones said he was encouraged that the Welsh Affairs Committee reflected many of the union’s concerns in its findings.
“I am heartened that many of the details that NFU Cymru put forward as evidence in the investigation highlight the serious concerns of members across Wales and are reflected in the committee’s report, conclusions and recommendations,” he said.
Mr Jones said the real-world implications of the proposed reforms were “some of the most difficult and heartbreaking reporting” shared by members over the past year, particularly among older farmers and those with terminal illnesses.
“Many of these farmers have built their lives on the assumption that their estates will not be subject to inheritance tax, but now they will be disproportionately affected by this policy,” he explained. “They don’t have any time left to arrange an alternative successor.”
The committee’s report also questioned the Treasury’s analysis of the number of farms affected, warning that the figures could be “misleading” due to a lack of detailed Wales-specific data.
Mr Jones said without accurate information there was a risk of underestimating the number of family farms that could fall under the new tax threshold. He added: “I remain firmly of the view that far more farmers will be affected by this new tax than the Treasury claims.”
NFU Cymru supported the committee’s call to postpone the reforms until a Wales-specific assessment could be published and scrutinized. The union also supports a review of all available data on farm ownership in Wales to get a clearer picture of how inheritance tax changes are likely to impact the sector.
“We urge the UK government to heed this advice, rather than rushing headlong into policies that we know will have a range of negative and unintended consequences,” Jones said.
The Welsh Affairs Committee’s report was tabled just two weeks before the Chancellor’s Autumn Budget on November 26, and its recommendations mirror those recently made by the Environment, Food and Rural Affairs (EFRA) Committee, which also called for a pause in the rollout of inheritance tax reform.
Mr Jones praised the Welsh Affairs Committee for its swift and cohesive response. “What makes this report particularly powerful is the fact that the committee, which has a diverse and cross-party membership, was able to reach a unanimous view on the true negative impact of inheritance tax policy on family farms in Wales and the need for deferral,” he said.
He added that MPs from all parties have shown a clear understanding of the issue, taking into account the real impact on ordinary farmers. “We have reached the view that a pause and review of the policy is necessary to better understand the impact on farmers and consider alternatives,” he said.
As the Budget approaches, NFU Cymru has renewed its call on the First Minister to recognize “the uniqueness, multi-generational nature of Wales’ agricultural sector and its importance to Wales’ culture and economy”.
Jones said there is a need to “pause and review this policy to consider the unintended consequences and consider some of the other proposals that have been put forward.”
Farmers are now awaiting the Prime Minister’s response, hoping the Budget will bring clarity and compassion to the next generation of Welsh family farms.
