Eagle quashes rumours of ‘family farm tax’ reprieve

In a blunt rebuff to media speculation, Defra farming minister Dame Angela Eagle has ruled out any softening of the government’s controversial inheritance tax (IHT) reforms on farmland and agricultural assets.

Speaking on BBC Radio 4’s Farming Today, she confirmed that the Treasury’s earlier announcements would stand.

Asked about a possible change of direction in the Autumn Budget on Wednesday 26 November, Dame Angela said: “Despite some of the speculation in the press, there is no likelihood that that will happen.

See also: Reeves still has time for reset on farming IHT, says NFU

“The announcements have been made and the situation will be as it was announced.”

She added: “I’m quashing them [the rumours]. We have been in discussions. The Treasury have made their announcement and they are not going to move.”

From April 2026, inherited agricultural assets worth £1m or more will be taxed at 20%.

Dame Angela repeated the government’s stance that “more than three-quarters of estates will not pay any IHT” while the rest will pay “half the inheritance tax most people pay”.

Dame Angela Eagle © Andy Taylor/Home Office

However, tax experts and farming organisations including the NFU, CLA and TFA say the effect is being seriously underestimated, especially for asset-rich but cash-poor family farms.

Farmers ‘refusing chemo’

Stuart Maggs, head of tax at Howes Percival LLP, said he was “extremely disappointed” by the minister’s comments.

“The farming industry is in an extremely serious situation. I’m aware of people who are refusing chemotherapy as a result of the proposed changes to inheritance tax,” he added.

“This change will be devastating to the farming industry and it is shocking that the government has chosen not to listen to the economic and humanitarian arguments surrounding this.”

He said the Treasury had ignored industry concerns, and any policy shift now looked “extremely unlikely” before the Autumn Budget.

“The draft legislation has been released. We are expecting that to be confirmed and it will probably be enacted next year,” he added.

“The government has a whopping majority, so unless there is a significant backbench rebellion, I cannot see that there will be any scope or time for movement.”

But Mr Maggs warned the policy would hit far more farms than government estimates suggest.

“It is heartbreaking – it will devastate the industry. People’s farming businesses will be rendered completely unable to operate as a result of these changes.”

He urged the government to pause its IHT policy plans and launch a consultation with industry.

Tax think tank CenTax has proposed an alternative “minimum share rule” to focus relief on genuine farms and exclude passive landowners.

Estates with at least 60% in farming or business assets would qualify, with full relief up to £5m, 50% relief up to £10m, and none above that.

CenTax says this could protect real farms and double Treasury revenue.

Some farming groups and farmers have welcomed the proposal, arguing it would shield vulnerable family farm businesses from IHT.

Protests to resume

Alan Hughes, a Shropshire tenant farmer and organiser with Farmers To Action, said he was “not surprised” by the minister’s stance, but he warned the CenTax model risked dividing the industry.

“Some diversified businesses – especially tenants – with more than 40% of land in non-farming use would be hit harder,” he said.

Mr Hughes said farmers would now escalate their protests.

“We will be doing more actions, including a co-ordinated protest on 31 October and go-slow tractor demonstrations on 24 November.

“Thereafter, there will be a winter of discontent.”

Herefordshire farmer Martin Williams, co-organiser of last year’s 10,000-strong Westminster farming rally, revealed exclusively to Farmers Weekly last week that discussions were being held across Whitehall on farm IHT ahead of the Budget.

Disappointed, frustrated

Mr Williams expressed disappointment over Dame Angela’s comments.

He said: “I’m disappointed to find that we are still talking about this issue 12 months on when we could have been talking about so many positive things.

“I think everything coming out from this government seems negative about agriculture. Farming should be able to stand on its own two feet. The handout mentality we have got at the moment is mentally degrading.”

Scottish Conservative shadow rural affairs secretary Tim Eagle MSP said it was “disgraceful” that the Labour government had ruled out any changes to its farm IHT policy in the Budget.

“Labour ministers should be ashamed at ignoring the huge opposition to their family farm tax, which erupted as soon as it was announced last year,” said Mr Eagle.

“Farmers will never forgive Labour for this betrayal and their introduction of measures that will destroy generations of family farming and put our future food security at great risk,”

A spokesman for the Treasury said: “The chancellor makes tax decisions at fiscal events. We do not comment on speculation ahead of them.”