Cornish Labour MPs Welcome Inheritance Tax Changes for Farms as Government Raises Relief Threshold

Cornish Labour MPs have welcomed changes to Inheritance Tax on farms after the UK Government confirmed a major increase to the threshold for Agricultural Property Relief and Business Property Relief.

The Government announced that the allowance for the 100% rate of relief will rise to £2.5 million, with a 50% rate of relief applying above that level. For married couples, this means up to £5 million of agricultural or business assets can be passed on, in addition to existing allowances such as the nil-rate band.

According to Government estimates, only a small number of estates will pay additional inheritance tax as a result of the reforms. Up to 185 estates claiming Agricultural Property Relief, including those also claiming Business Property Relief, are expected to pay more inheritance tax in 2026–27. This means around 85% of estates claiming Agricultural Property Relief in that year are forecast not to pay any more inheritance tax because of the changes.

Cornish MPs say farmers’ voices were heard

The four Cornish Labour MPs say they have worked closely with farmers, industry groups and Government departments over the past year to press for changes.

Anna Gelderd, Member of Parliament for South East Cornwall, said she had spent the past year listening to farmers, working with industry experts and raising concerns directly with DEFRA and Treasury ministers.

She said the higher threshold would give much-needed certainty, protect family-run farms and reflect the pressures facing modern agriculture. Anna also thanked the local farming community for their engagement, saying national policy was now better aligned with those producing food.

Noah Law, Member of Parliament for St Austell and Newquay, said the changes help safeguard family farms while giving more favourable treatment to smaller farms compared to large-scale operations. He said it showed that constructive engagement with Government could deliver results and hoped it would give reassurance to farmers in Cornwall over Christmas.

Perran Moon, Member of Parliament for Camborne, Redruth and Hayle, said he was delighted the Government had listened after months of consultation with farmers in his constituency and feedback passed directly to the Treasury. He said the announcement would bring Christmas relief to many farmers and highlighted his work with the Labour Rural Research Group alongside his Cornish colleagues.

Jayne Kirkham, Member of Parliament for Truro and Falmouth, said she was pleased and relieved by the change, particularly for elderly farmers who had been worried about the impact of inheritance tax. She said family farmers in her constituency would now be protected up to more than £5 million if the spousal allowance is also used.

Farming sector welcomes change but raises concerns

Nationally, the change follows lobbying by the Country Land and Business Association, which has been campaigning since the reforms were first announced in 2024.

Gavin Lane, President of the CLA, said the announcement would come as an enormous relief to thousands of family farms that had feared being taxed out of existence. He said the Government deserved credit for recognising flaws in the original policy and changing course.

However, he added that while the change limits the damage, it does not remove it entirely. He said many family businesses own high-value land and machinery but operate on narrow profit margins, meaning the tax burden could still be unaffordable. He said the CLA would continue to call for the reforms to be scrapped altogether, while working with ministers to support growth in the rural economy.