FUW issues unprecedented warning to MPs over ‘existential’ threat from inheritance tax overhaul

The Farmers’ Union of Wales (FUW) has written to every MP across the UK, warning that the UK Government’s proposed overhaul of inheritance tax could deliver a devastating blow to Welsh family farms and the rural economy.

FUW President Ian Rickman has contacted MPs ahead of next week’s UK Budget, urging ministers to rethink reforms due to take effect from April 2026.

The changes, which would end long-standing inheritance tax exemptions for agricultural property, could see estates valued over £1 million face a 20% charge when passed between generations.

The union has warned for months that the reforms would hit Wales disproportionately, threatening the future of family-run farms that form the backbone of rural communities.

FUW analysis suggests up to 48% of Welsh Basic Payment Scheme recipients could be affected—far higher than the UK Government previously claimed.

Last week, the Welsh Affairs Committee said the proposals had created a “climate of uncertainty and confusion” across the sector, calling for a Wales-specific impact assessment before the reforms are introduced.

Meanwhile, MPs on the Environment, Food and Rural Affairs Committee (EFRA) have urged ministers to delay final decisions until October 2026, arguing the Government has not yet carried out adequate consultation or affordability assessments.

In his letter, Mr Rickman acknowledges pressure on the public purse but stresses that small family farms, often run on tight margins and passed down through generations, would be least equipped to cope with sudden tax liabilities.

He warned that grieving families could be forced to sell vital assets — livestock, machinery or even land — simply to meet a new tax bill, undermining the viability of their farms. The risk, he said, is an acceleration of the decline of family-run holdings and further erosion of rural culture and economic stability.

Unprecedented

“It is highly unusual for an FUW President to contact elected representatives from all four UK nations — and perhaps unprecedented to write to every MP,” Mr Rickman said. “But we feel compelled to act at this eleventh hour. The proposed changes pose an existential threat to family farms in Wales and to the wider rural community.”

He added: “Many of our members now worry that upon their death their loved ones could face an unaffordable tax bill simply to inherit the family farm. These are holdings built through generations of hard work. We cannot allow families to be stripped of their livelihoods.”

The Union has backed alternative proposals — including options developed by the CenTax think tank — that would preserve relief for farms that continue agricultural activity, while taxing assets only at the point of eventual sale.

With the Budget days away, Mr Rickman has urged MPs from all parties to intervene directly with the Chancellor. “The decisions made now will determine whether family farms can continue to be passed on with confidence to the next generation,” he said. “What happens next will have lasting consequences for the families and communities who depend on these farms.”

Responding to the FUW, a HM Treasury spokesperson said: “We’re backing British farms with £1 million Annual Investment Allowance for plant and machinery investments, billions for sustainable food, and action to cut EU export costs.

“Right now 40% of Agricultural Property Relief – worth £219m – goes to just 117 estates. Our reforms will channel that funding into vital public services.”