Welsh farming unions support Welsh Affairs Committee’s call for delay to inheritance tax changes

The House of Commons’ Welsh Affairs Committee published a report on Wednesday following its inquiry into Farming in Wales in 2025: Challenges and Opportunities. 

NFU Cymru and the FUW had submitted both oral and written evidence to the inquiry. 

Among the report’s conclusions is a recommendation that the UK Government must delay implementing its final reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR) until an impact assessment has been published and scrutinised by the committee.

NFU Cymru President, Mr Aled Jones said: “I am heartened that so much of the detail presented by NFU Cymru in its evidence to the inquiry, highlighting the significant concerns of members across Wales, has been reflected in the committee’s report, its conclusions and recommendations.

“Over the last 12-months, some of the most difficult and heart-rending accounts which have been shared with me involve elderly farmers or those with terminal illness. Many of these farmers have arranged their affairs on the basis that their estates would not be subject to inheritance tax but now they stand to be disproportionately affected by this policy, as they simply do not have the time left to make alternative succession arrangements. I take comfort that the committee has also identified this as an area of concern.

“The committee’s report challenges the Treasury’s assessment of the number of farms likely to be affected by the inheritance tax policy changes on the basis that these general indications of farm values are produced in the absence of key information concerning individual businesses², which could lead to a ‘misleading’ picture. This lack of precision in the Treasury data is further compounded by the lack of Wales level data. I remain firmly of the view that far more farms will fall into the scope of this new tax than the Treasury claims.

“NFU Cymru firmly supports the committee’s recommendation to UK Government calling for a delay to the APR and BPR reforms until a Wales specific impact assessment has been published and scrutinised by the committee. We also concur with the recommendation for a revisiting of all the available data relating to farm ownership in Wales to develop a more detailed understanding of the potential impact that changes to inheritance tax may have on farmers in Wales. I urge the UK Government to heed this advice rather than hurtling headlong into a policy which we know gives rise to a range of negative and unintended consequence.”

The release of the Welsh Affairs Committee’s report arrives just two weeks ahead of the UK Government’s autumn budget announcement on Wednesday, November 26.

Many of the conclusions and recommendations contained with the report – including the request for a pause in the rollout of the inheritance tax changes - echo those of another House of Commons Cross-party committee, the Environment, Food and Rural Affairs (EFRA) Committee.

Mr Jones said: “Ahead of the budget later this month - and in light of the Welsh Affairs Committee’s report - NFU Cymru is repeating its call to the Chancellor to recognise the uniqueness of Wales’ farming sector, its multi-generational nature and its importance to Wales’ culture and economy. There must be a pausing and reviewing of this policy to look at its unintended consequences and to consider some of the other proposals which have been put forward.”

The Farmers’ Union of Wales (FUW) also welcomed the report which criticises the UK Government for its “complacency” in overlooking the long-term impact of its policies on the sustainability of Welsh agriculture.

In its final report, published this week, the Committee points to the unique context of agriculture in Wales, which occupies over 90% of Wales’ land area, and which employs 11% of the UK’s total agricultural workforce despite containing less than 5% of its total population. 

However, despite contributing to a food and drink sector worth over £9.3 billion to the Welsh economy, Welsh farming has been suffering from a declining workforce, declining livestock numbers, and lower incomes than elsewhere in the UK. 

The report pays particular attention to the UK Government’s proposed inheritance tax (IHT) reforms, expressing concern over the lack of clarity regarding their potential impact on Welsh farming. 

Committee members warn that the changes could disproportionately affect elderly farmers and those with terminal illnesses who have structured their affairs in line with existing tax advice. 

Without further guidance, these individuals risk leaving their families facing unexpected and significant tax burdens upon their death.

The Committee accuses UK Ministers of complacency in failing to conduct any assessment of the impact the changes would have on Welsh farming, creating “an unnecessary climate of uncertainty and confusion… in an industry central to the cultural, environmental and economic fabric of rural Wales”, and calls on the Government to delay implementation of IHT reforms until a Wales-specific Impact Assessment has been conducted.

FUW President, Ian Rickman said: “This report sends a clear and timely message to the UK Government that Welsh farming cannot continue to be treated as an afterthought in Whitehall. The Committee has rightly recognised the unique nature of agriculture in Wales; its scale, its contribution to our economy, and its vital role in sustaining our rural communities. Yet too often, UK policy fails to take those distinct circumstances into account.

"The proposed inheritance tax changes and the ‘Barnettisation’ of agricultural funding both risk undermining the long-term sustainability of Welsh family farms at a time when the industry is already under a perfect storm of rising costs, volatile markets and future uncertainty. 

"As we approach the Autumn Budget, the Chancellor must take these findings seriously and ensure that future decisions genuinely protect our family farms, strengthen food security, and secure a sustainable future for Welsh agriculture.”

 Welsh Liberal Democrat Westminster Spokesperson David Chadwick said: “It is crystal clear that the UK Government must urgently rethink its approach to the family farms tax.

“There are practical, fair alternatives on the table that would close loopholes exploited by large multinationals, without inflicting the devastating harm this policy would cause to our rural economy and communities.

“The Government should listen to reason, take stock, and go back to the drawing board.

“The Welsh Government appears to have taken contradictory positions, publicly raising concerns about the UK Government’s changes to agricultural funding while privately asking for the ringfence on that same funding to be removed. 

"This revelation exposes yet another instance of fundamental dishonesty from the Welsh Labour Government in its dealings with the UK Government. Ministers cannot say one thing in public and do the opposite behind closed doors. Rural Wales deserves honesty and consistency, not political games.  

“The First Minister must now give a cast-iron guarantee that she will not use the removal of this ringfence as an excuse to cut the agricultural budget, either this year or in future years.”