Farm tax climbdown welcomed locally

CHANGES to the 'family farm tax' have been welcomed in the region after months of campaigning.

News broke last week that the UK Government has decided to increase in the Inheritance Tax threshold from £1m to £2.5m per spouse.

Reacting, the team NFU Scotland Dumfries and Galloway said: "Some welcome news! Some positive news! Thank you to everyone who got involved over the last 14 months."

Also pleased at the 'partial climbdown' was Dumfriesshire MP David Mundell, who said: “Labour’s ‘Family Farm Tax’ has been widely condemned here in Dumfriesshire and elsewhere as a threat to the future of British farming, so any easing of it is to be welcomed. However, the fact is that it is only a partial climbdown, and the Government is still proposing to draw many family run farms into the scope of inheritance tax, while completely ignoring the unique nature of that industry.

“The Government says it’s listened to farmers, but this announcement does not fully restore the previous agricultural relief, so in reality it only limits the damage being caused. Many modestly-sized family businesses will own enough machinery and land to be valued above the new threshold, yet still operate on such narrow profit margins that this tax burden remains unaffordable.

“I am prepared to welcome this partial climbdown for what it is, but we need to see the Government go further and fully restore the agricultural reliefs that helped family farms survive and be passed down through the generations. Anything short of that continues to pose a serious threat to the viability of traditional farming here in Dumfriesshire and across the country.”

In addition, the team at Armstrong Watson has also cautiously welcomed the proposed reforms.

Their head of agriculture, David Threlkeld, said: “After much campaigning across the entire sector, the news will be welcomed by our farming families.

"However, whilst the increased allowances are positive, many farmers and business owners still face the prospect of significant inheritance tax liabilities on their death. Steps can be taken before 5 April 2026 to help mitigate the changes and I would advise farmers to seek specialist professional advice early in the new year.”