Today the government announced really welcome changes to Agricultural and Business Property Relief. I know how strongly many farmers and rural communities across West Cumbria feel about this issue.
From the outset, I have been clear that family farms must be protected. Policy only works when it reflects the real, lived experience of the people it affects. That is why, over recent months, I have spent a great deal of time listening to farmers locally and feeding those views back into government. I have not held back!
Alongside other Labour MPs representing rural and farming communities, I have been involved in extensive behind-the-scenes work with ministers in both the Treasury and Defra. That has meant many detailed conversations – sometimes challenging, always constructive – about how inheritance tax changes would land on family farms like those here in West Cumbria.
Those conversations have made a difference.
The government has listened and has now confirmed a significant increase in the Agricultural and Business Property Relief threshold, alongside the introduction of spousal transfer.
Under the changes announced today, the inheritance tax threshold for Agricultural and Business Property Relief will rise from £1 million to £2.5 million when the reforms come into force in April 2026. Crucially, this allowance can now be transferred between spouses or civil partners, meaning a farming couple will be able to pass on up to £5 million of qualifying farm and business assets before any inheritance tax is paid, on top of existing personal allowances. As a result, the number of farms affected by inheritance tax will be cut by around half, with the vast majority of family farms paying no additional tax at all. For those larger farms that are affected, bills will be significantly reduced, ensuring the reforms focus only on the very largest estates while better protecting working family farms.
The National Farmers’ Union has been clear about the importance of this shift, saying:
“I am thankful common sense has prevailed, and the government has listened… These conversations have led to today’s changes, which were so desperately needed. From the start, the government said it was trying to protect the family farm, and the change announced today brings this much closer to reality for many.”
That reflects exactly what farmers here have been telling me – and what I and colleagues have been consistently raising with ministers.
I support the principle that the very largest estates should pay their fair share, but I have also been clear that the threshold originally proposed was too low and risked unintended consequences for working family farms. Increasing the allowance and allowing spouses to transfer it between them is the right move, and one that has only been possible because of sustained engagement between farmers, the NFU, and Labour MPs pressing the case from rural Britain.
I want to thank everyone who has taken the time to share their experiences and concerns with me. This change shows that when government listens – and when local voices are taken seriously – policy can be improved.
I will continue to work with colleagues in Westminster to make sure farming has a strong voice at the heart of government, and that policies affecting rural communities are shaped with you, not done to you. I hope to have more to say on my efforts to devolve support for farming and nature recovery to Cumbria in January.
Don’t forget that my next Farmers’ Forum takes place on 30th January at 6pm. Register at joshmacalister.uk/meetjosh
Josh MacAlister MP 