Uk government raises farm inheritance tax threshold to £2.5 million following agricultural sector pressure

The UK government has significantly revised its controversial inheritance tax reforms affecting agricultural properties, more than doubling the proposed threshold from £1 million to £2.5 million. This dramatic policy shift comes amid mounting pressure from farming communities and environmental advocates concerned about the long-term sustainability of British agriculture.

The original £1 million threshold had sparked widespread opposition from farmers who argued it would force family operations to sell productive agricultural land to pay inheritance taxes, potentially fragmenting sustainable farming operations that have been passed down through generations. Environmental groups had similarly expressed concerns that the policy could accelerate the conversion of farmland to development, reducing biodiversity habitats and threatening food security.

Under the revised policy, family farms valued up to £2.5 million will remain exempt from inheritance tax, allowing more agricultural operations to stay intact across generations. This change is expected to protect thousands of medium-sized farms that play crucial roles in rural ecosystems, from maintaining hedgerows and wildlife corridors to practicing sustainable land management techniques.

The policy revision reflects growing recognition of agriculture’s dual role in both food production and environmental stewardship. Many family farms serve as guardians of traditional landscapes, support pollinator populations, and implement conservation practices that larger commercial operations may overlook. By ensuring these operations can continue operating without the financial pressure of inheritance taxes, the government aims to maintain both agricultural productivity and environmental benefits that smaller, generational farms often provide to local ecosystems.