Farming leaders seek Budget u-turn from Burnham on inheritance

The Budget, scheduled for Wednesday, October 28, is being viewed across the industry as the government's next opportunity to revisit inheritance tax changes that came into force earlier this year and continue to dominate succession planning discussions on family farms.

The Ulster Farmers' Union (UFU) has written to the Prime Minister urging him to honour his pre-election commitment to "look again" at the policy, arguing that uncertainty over inheritance tax is still affecting long-term investment and the future of farming businesses.

UFU president John McLenaghan said Mr Burnham had acknowledged farmers' concerns before entering Downing Street and must now translate those promises into action.

"Before becoming Prime Minister, Andy Burnham recognised the devastating impact these measures would have on family farms and committed to looking again at Agricultural Property Relief and Business Property Relief," he said.

"Now is the time to follow through on that commitment."

The revised inheritance tax rules came into effect on April 6, 2026 after months of campaigning by farming organisations across the UK.

Under the current arrangements, qualifying agricultural and business property receives 100% inheritance tax relief up to £2.5 million, with relief reduced to 50% on qualifying assets above that threshold.

Unused relief can still be transferred between spouses or civil partners, meaning farming couples can potentially pass on up to £5 million in qualifying agricultural and business assets before the reduced rate applies, alongside existing inheritance tax allowances.

The government increased the threshold from the original £1 million proposal following widespread opposition from the farming industry, but representative bodies say the revised policy still leaves many businesses exposed.

For farms with significant land values, diversified enterprises or multi-generational businesses, succession planning remains a major concern.

The UFU says the remaining inheritance tax liability is continuing to influence decisions about investment, expansion and succession.

Mr McLenaghan said family farms need certainty if the next generation is to have confidence in taking over businesses.

"We hope the Prime Minister will honour his commitment to re-look at the proposals, and the government must use the autumn Budget, or tax measures before then, to deliver a policy that protects the future of family farms and gives the next generation confidence to invest in the industry," he said.

The union argues that uncertainty surrounding inheritance tax is undermining long-term planning at a time when farming businesses are already facing rising costs, policy change and volatile markets.

The UFU is not alone in calling for a change of course.

The Country Land and Business Association (CLA) has described the arrival of a new Prime Minister as an opportunity for a "rural reset", arguing that reversing the inheritance tax changes would help restore confidence across the countryside.

CLA president Gavin Lane said a full reversal was needed to encourage investment in farming and the wider rural economy.

The Countryside Alliance has also continued its campaign against the policy, saying it has caused significant anxiety for farming families across the UK.

Ministers have maintained that the changes strike a balance between protecting most family farms and ensuring larger estates make a greater contribution through inheritance tax.

Government estimates suggest around 85% of estates claiming APR will face no additional inheritance tax liability under the revised rules, with approximately 185 estates expected to pay more tax during the 2026-27 financial year.

However, farming organisations argue that official figures fail to reflect the reality of modern family farming businesses, particularly in areas where land values are high or where businesses combine agricultural and diversified enterprises.

The autumn Budget is now being seen as a critical test of the new government's relationship with the farming industry.

Since taking office, Mr Burnham has acknowledged there is work to do to rebuild trust with rural communities and has spoken about the importance of domestic food production.

Industry leaders say those comments must now be backed by policy.

With succession planning remaining one of the biggest issues facing family farms across Scotland and the wider UK, many will be watching closely to see whether October's Budget delivers further changes to APR and BPR — or leaves the current inheritance tax regime in place.