Prime Minister Assures ‘Vast Majority’ of Farmers Unaffected by Inheritance Tax Adjustments

The Prime Minister has stated that revisions to agriculture inheritance tax will not impact “the vast majority” of Welsh farmers. This follows an announcement last month by Chancellor Rachel Reeves, who indicated that exemptions for certain farms would cease in the Budget. During a visit to Wales on Friday, Sir Keir Starmer expressed his understanding of farmers’ concerns and affirmed his desire to support them. The National Farmers Union has characterized these changes as “disastrous,” asserting that they would compel family farmers to sell land to cover tax obligations. Beginning in April 2026, farms valued over £1 million will be subject to an effective inheritance tax rate of 20%, which is half the standard rate of 40%. The Prime Minister clarified that, in a “typical case,” a threshold of £3 million would apply before any agricultural inheritance tax becomes payable. The Prime Minister’s visit took place at the Airbus aerospace plant in Broughton, Flintshire, preceding Welsh Labour’s autumn conference scheduled in Llandudno. The Prime Minister further elaborated, stating, “The small number that would be affected, of course, then would only paid 20% and it would spread over 10 years.” He also highlighted, “We put £5bn in over the next two years into farming in the budget, which is the single biggest amount that any government has put into farming.” While the Welsh government receives a portion of this £5 billion, the discretion for its expenditure rests with Welsh ministers. Previously, First Minister Eluned Morgan indicated that Welsh government calculations suggested a “tiny proportion” of farms in Wales might be affected by the tax adjustment, though the precise figure was still being determined.