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Farmers across the country are celebrating after Sir Keir Starmer bowed out after months of pressure farmers and foiled a plan to impose a tax on inherited agricultural land.
Chancellor announced under the schemes Rachel Reeves Last year, farmers were to be charged a 20 per cent fee on farm assets worth more than £1m from April 2026. storm of fury, with Fears that family-run farms will be most affected,
But on Tuesday, Labor said it was raising the threshold from £1m to £2.5m, meaning most farms would not have to pay it.
The decline follows crucial talks between National Farmers Union (NFU) president Tom Bradshaw and the Prime Minister last week. Independent After a year of protests about the measures, it makes sense.
Gareth Wyn Jones, a farmer from north Wales who was one of the leaders of the protests against the tax, told Independent The announcement was “very good news”, while the former top Gear Presenter Jeremy Clarkson, who has also been highly critical of the policy, welcomed the drop.
Meanwhile, a farmer whose father committed suicide amid concerns over inheritance tax changes the day before last October’s budget said the government collapse was “the best Christmas present ever for a lot of farmers”, but he accused ministers of displaying a “complete lack of understanding and compassion” in relation to rural communities.
Jonathan Charlesworth, who found his father John Philip Charlesworth dead in a barn at his farm in Silkstone, Barnsley, said: “This is a welcome U-turn which will not bring back the lives lost over the last year or so due to concerns but will hopefully prevent the spate of suicides that began in April.”
He said: “The other side is that this should have been researched and put to review before any announcement was made.”
Defra said the higher limit, which will come into effect in April, will, in addition to existing allowances, allow spouses or civil partners to pass up to £5m in qualifying agricultural or business assets between them before paying inheritance tax.
Additionally, farmers will get 50 per cent relief on eligible properties above the threshold, paying a lower effective rate of up to 20 per cent instead of the standard 40 per cent.
According to the government, the number of properties facing higher inheritance tax will be reduced from around 2,000 under the original plans to around 1,100, meaning it will only affect the largest farms.
Farmers do not currently pay inheritance tax on agricultural and commercial properties.
Mr Bradshaw said: “After months of NFU campaigning, the Government has today announced changes to the inheritance tax threshold for family farms. These changes mark a huge victory for British farmers.”
Campaign group No Farmers, No Food welcomed the news, but warned that the decline did not go far enough. He said: “Huge news for family farmers. The Labor government has finally made a U-turn on the inheritance tax on family farms. It’s still not enough, but it’s still a huge victory for everyone who has campaigned relentlessly on this.”
Mo Metcalfe-Fisher, director of external affairs at the Countryside Alliance, said: “This partial change to the devastating family farming tax is welcome. It has caused many months of unnecessary pain and suffering. It is clear that the Government has realized that the growing perception that it is at war with the countryside is toxic.
“Whether the government will learn the basic lesson of this policy debacle, which is that it needs to work with the rural community – not legislate against it – remains to be seen. The government has a very long way to go to restore trust.”
Environment Secretary Emma Reynolds said: “Farmers are at the heart of our food security and environmental stewardship, and I am determined to work with them to secure a profitable future for Britons.” FarmingWe’ve listened closely to farmers across the country, and we’re making changes today to protect more ordinary family farms,
“It is right that larger properties contribute more, while we support the farms and commercial businesses that are the backbone of Britain’s rural communities.”
Fury over the so-called “tractor tax” or “family farm tax” prompted regular protests in London, with tractors descending on Whitehall.
After reaching Sir Keir Farming Community ahead of 2024 election, inheritance tax changes seen as a “breach of trust” Farming The groups have warned that despite today’s decline, Labor will find it difficult to win back their trust.
This issue dominated responses to the government’s recent review of farm income and profitability Minette Batters, former President of the NFUWhich was published last week.
Even tax experts Dan Needle is the architect of the proposal to impose inheritance tax on agricultural propertieswarned that the original £1m limit was too low and should have been closer to £20m.
Tory shadow environment secretary Victoria Atkins described the climbdown as “too little, too late”.
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Tim Farron, rural affairs spokesman for the Liberal Democrats, welcomed the news, but said: “It is completely inexcusable that family farmers have had to endure more than a year of uncertainty and suffering since the government first announced these changes.”
Richard Tice, deputy leader of Reform UK, said: “This scandalous drop – although better than nothing – does little to address the years of anxiety that farmers have faced as they plan to protect their livelihoods.”
It is the latest major economic policy U-turn by Sir Keir’s government in the 17 months since winning the election. An effort to get rid of winter fuel payments for 11 million pensioners was largely abandoned, while the government backed down from a bid to cut welfare by £5 billion a year after a rebellion by Labor MPs.
Following pressure, Sir Keir also changed his position to retain the two-child benefit limit. And a planned rise in income tax was abandoned before it could be implemented because the Chancellor had announced it was likely to happen.
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