Budget 2026: farming groups hoping for inheritance tax U-turn by John Healey

Opposition politicians believe that there is a “real chance” that the Chancellor does scrap the changes.

Farming groups are pressing for the Chancellor to U-turn on Rachel Reeves’ controversial inheritance tax policy on farmers and agricultural businesses as part of a “rural reset” at the Budget.

Opposition politicians believe that there is a “real chance” that John Healey does scrap the changes, which enforced levies on families handing their farms down through the generations.

In her first budget in 2024, Ms Reeves announced she was reforming agricultural (APR) and business property relief (BPR), the discount to allow agricultural businesses to be passed down to children and grandchildren.

The Chancellor said she was introducing a discounted rate on businesses valued at over £1m, a hugely contentious move that farmers said would force them to sell off land and change the fabric of the British countryside for good.

One inquest revealed that a farmer had taken his own life when worried about the deadline earlier this year. Just before Christmas, the Government announced that it was increasing the threshold to £2.5m, with married couples allowed to combine their relief to £5m.

However, in the Makerfield by-election Andy Burnham indicated he would be willing to look again at the inheritance tax policy.

Shadow Farming Minister Robbie Moore, who is also the Keighley and Ilkley MP, told The Yorkshire Post: “We clearly have a prime minister that is going around, effectively being a yes man to every sector going.

“The reality of it is, he's got some tough choices to make. As the Conservative Party, we've been clear from day one that we will put 100 per cent relief back into agricultural property relief and business property relief.

“I.e scrap the family farm and family business tax. That needs to happen. I continue to advocate that this Labour government must do that at the next Budget.

“Now, whether or not they are going to do that, we'll wait and see. We are hearing a little bit of mood music that that is going to happen.

“But we must keep the pressure on those Labour backbench MPs that represent many a family business, because this isn't just farmers - your manufacturing businesses, your hospitality sectors, your hoteliers are all being impacted by this.”

Ahead of the Budget, the Countryside Alliance sent a letter to Mr Healey outlining a number of measures, including scrapping inheritance tax, as part of a rural reset.

Chief executive Tim Bonner said that a key priority was fuel, with global oil prices continuing to rise and diesel at record highs.

Mr Bonner called for the temporary 5p fuel duty cut to be made permanent, alongside an interim reduction in VAT on fuel as an emergency measure.

He made the point to Mr Healey that rural residents and businesses are disproportionately affected by the rising prices at the pumps.

He said: “John Healey’s first Budget is a chance for the government to show it has heard the message from rural Britain.

“After two years in which rural communities across the country have faced damaging policy after damaging policy, many rural people feel they are not being heard. This Budget is an opportunity to change that.

“With winter approaching, fuel is the most pressing concern. In the countryside a car is a necessity, so making the 5p fuel duty cut permanent and easing VAT would make a genuine difference to household and business bills.

“The Prime Minister has promised good growth in every postcode. The measures we have set out are practical and achievable, and acting on them would show that the government is serious about a rural reset.

“We stand ready to work with the Chancellor and his officials to make that happen.”