No 10 denies trying to bury inheritance tax policy U-turn during Christmas week

Downing Street denied trying to bury a U-turn by changing inheritance tax policy during the Christmas week, and said the move came after “open dialogue” with the farming sector.

The UK Government will end farmers’ full relief from inheritance tax in April, and had been set to raise money from their business assets after the first £1 million, which could be passed on tax-free.

But the full relief threshold will now be set at £2.5 million, following an announcement on December 23.

Asked whether the date was chosen to quash news of a U-turn, the Prime Minister’s official spokesman said: “This decision was taken after careful consideration and engagement with the farming community and family businesses.

“And listening and responding to concerns is a sign of good government, not weakness.”

He later added: “We’re confident we’ve struck the right balance between supporting rural communities and maintaining fiscal responsibility.”

No 10 said the Government has “always been clear about keeping an open dialogue and the importance of that with farmers and the rural community”.

Sir Keir Starmer faced a small rebellion over the tax changes, when Penrith and Solway MP Markus Campbell-Savours voted against them in the Commons. Mr Campbell-Savours lost the party whip.

And several Labour MPs urged ministers to reconsider the plans before they broke up for the Christmas recess, including South Derbyshire MP Samantha Niblett and North East Hertfordshire MP Chris Hinchliff, who called for “immediate action” if small farms began to close next year.

The UK Government had allocated “a record £11.8 billion to sustainable farming and food production over this Parliament”, according to No 10.