Government's farm tax U-turn welcomed

FARMERS across Tyrone and Northern Ireland have welcomed changes to planned inheritance tax rules, after the government announced a higher threshold for taxing agricultural assets passed on within families.

At last year's Budget, ministers said they would start imposing a 20 per cent tax on inherited agricultural assets worth more than £1m from April 2026, ending the 100 per cent tax relief that had been in place since the 1980s.

However, just days before Christmas, the government announced that the planned threshold would increase from £1m to £2.5m.

The Ulster Farmers’ Union (UFU), which represents farmers across Northern Ireland, said the move represented a step in the right direction for farming families, leaving the industry in a better position than it was, but stressed the outcome is still not ideal for everyone.

The change follows sustained and coordinated lobbying by the UFU alongside the other UK farming unions, supported by members, industry partners and stakeholders, and is expected to help significantly more Northern Ireland farm businesses than was previously the case.

While further detail and analysis are required to fully understand the implications, the UFU says the announcement demonstrates the impact of a united voice across the UK farming industry.

Speaking following the news, UFU president, William Irvine, said: “The UFU have lobbied tirelessly in opposition to the devastating inheritance tax proposals since they were announced in the 2024 Autumn Budget, and we are very relieved that those efforts were not in vain.

"We’ve led a unwavering campaign in collaboration with the UK farming unions, highlighting the devastating consequences the IHT changes would have on farming families, especially those here in Northern Ireland with our unique farming structure.”

The UFU continuously raised with government how NI will be severely and disproportionately affected by IHT as a result of high land values, an older demographic of farmers and a greater prevalence of sole-owner, livestock-based farms.

“The government’s decision to go ahead with the IHT proposals was a shock to us all, but thankfully the sincerity and courage of our farm families who stood up and shared intimate fears for their farm has finally rung through," Mr Irvine continued.

“The strength and resilience of our farming community has brought this change and the UFU wish to thank each and every farmer who played their part.

"We stood as a united force, determined to make a difference, and showed the government that they need to support and protect local food production and farming. It shows what can be done when we work together.”

The president confirmed the UFU will continue to lobby for further changes to IHT proposals in the longer term.

“We are in a better position today than we were yesterday, and we wish to thank the NI Executive, DAERA Minister, NI MPs and local politicians for their support and assistance,” he added.

“But the work is still not done, we will continue to lobby for the full reversal of family farm tax in the longer term. We have made huge progress, but there is more to be done.

“For now, this year has been an immense challenge for our local farmers, and hopefully this news will lift a weight off the shoulders of many families, allowing them to enjoy a peaceful Christmas and a prosperous new year.”

West Tyrone Sinn Féin MP., Órfhlaith Begley, welcomed the move.

"I welcome the British government’s u-turn on family farm tax.," she said.

"These changes would have had devastating consequences for our rural communities and economy.

"Sinn Féin will keep speaking up for family farms and work to ensure agriculture policies are fair and proportionate."

West Tyrone SDLP MLA., Daniel McCrossan, who is the Opposition party's AERA spokesperson, described the move as "extremely positive news for farming families right across Northern Ireland".

"The increase to £2.5 million and £5 million will remove the vast majority of local family farms from any risk of this tax," he said.

"The SDLP has been working closely with farmers to raise their concerns and pressed Ministers to understand the impact here in the North.

"Family farming depends on being able to pass land and business to the next generation. This decision protects that traditions.

“Most farms are now fully protected, but if you are unsure what this means for you or your family, my office is ready to help. We are here to support farmers every step of the way.”