Shadow minister hits out over ‘family farm tax’ plans

Shadow Rural Affairs Secretary Samuel Kurtz MS has accused both the UK and Welsh governments of failing rural communities by refusing to scrap proposed changes to Agricultural Property Relief (APR), which he branded the “family farm tax”.

The UK Government has confirmed it will press ahead with reforms to APR under Inheritance Tax – a move that farming leaders warn could threaten the viability of family farms in Wales and across the UK.

The changes, due to take effect from April 2026, will see inherited agricultural assets worth £1m or more taxed at 20%.

Significant flaws

Ministers argue the majority of estates will be unaffected, but farming unions say the impact on intergenerational farms could be severe.

The Farmers’ Union of Wales (FUW) has highlighted what it says are “significant flaws” in the Treasury’s calculations.

By including smallholdings and non-working farms in its estimates, the union says the Treasury has downplayed the true scale of the threat.

According to the FUW, nearly 90% of farms responsible for agricultural output in Wales could face inheritance tax bills far exceeding their incomes, creating an existential crisis for the agricultural sector.

Mr Kurtz, Welsh Conservative Shadow Cabinet Secretary for Rural Affairs, said the refusal to change course showed a deep disconnect between Labour and rural communities.

Devastating

“This family farm tax will be devastating for Welsh farmers,” he said. “Generations of family-run farms could be forced to sell land or break up holdings just to meet inheritance tax bills. It is an attack on the very fabric of rural Wales.”

He added that farmers were already under immense pressure from rising costs, uncertain markets and agricultural policy changes.

“This new tax burden could be the final straw for many. Labour in Westminster has made it clear they do not understand rural life. But what is worse is that Labour in Cardiff Bay will not even condemn this reckless policy. Their silence speaks volumes.”

Mr Kurtz also criticised Welsh Labour MPs for failing to press their government to reconsider. “Our family farms are the backbone of rural Wales. They sustain communities, protect our landscape and feed our nation. They deserve support, not punishment.”

Speculation

His comments follow confirmation from UK farming minister Dame Angela Eagle that there will be no softening of the government’s inheritance tax reforms. Speaking on BBC Radio 4’s Farming Today, she dismissed speculation about a possible U-turn in the Autumn Budget.

“Despite some of the speculation in the press, there is no likelihood that that will happen,” she said. “The announcements have been made and the situation will be as it was announced. The Treasury have made their announcement and they are not going to move.”

Dame Angela insisted that “more than three-quarters of estates will not pay any IHT” and that those affected will pay “half the inheritance tax most people pay”.

‘Unaffected’

A UK government spokesperson said: “Most estates claiming Agricultural and Business Property Reliefs will be unaffected by the changes. The latest data shows that 40% of Agricultural Property Relief – worth £219m – was directed to just 117 estates. The money raised will go towards public services we all rely on every day instead.

“We’re also investing billions of pounds in sustainable food production and nature’s recovery, negotiating a veterinary agreement with the EU to slash costs for food producers to export to the EU, and have appointed former NFU president Baroness Minette Batters to advise on reforms to boost farmers profits.”