The Farmers’ Union of Wales has spent the past year warning the UK Government that its proposed reforms to inheritance tax (IHT) pose a profound and long-term threat to Welsh family farms and the rural communities they support.

Throughout 2025, we have held extensive discussions with MPs from all parties, Treasury officials and other key decision-makers to emphasise a simple but vital point: family farms must be protected from policies that risk undermining their ability to pass businesses securely to the next generation.

Last week’s Autumn Budget offered a partial shift in the right direction. The Chancellor committed to ensuring that the proposed relief for the first £1 million of agricultural and business assets will be fully transferable between spouses - a move the FUW has consistently called for as a minimum safeguard. This commitment is welcome, and it will undoubtedly ease succession pressures for some farming families.

We also welcome the decision to retain current lifetime gifting rules, another important element the FUW has urged the Treasury to preserve. These rules play a crucial role in enabling families to plan ahead and transfer responsibility smoothly over time.

However, despite these limited improvements, the Government has chosen not to reverse the wider reforms to inheritance tax. These proposals still risk imposing unaffordable tax bills on farming families at the point of succession, placing unnecessary strain on businesses that are already operating in a challenging economic environment. If implemented as planned, these reforms could cause lasting damage to Welsh agriculture, rural supply chains and food production, and the broader rural economy.

Family farms depend on continuity, stability and the ability to plan for future generations. The Government’s broader approach to IHT reform undermines these principles. While we recognise the Chancellor’s willingness to make one important change, it falls well short of what is needed to properly protect Welsh family farms from long-term harm.

It is not too late for MPs to act. The FUW will continue to make the case in Westminster and beyond that further amendments to this policy are needed. We urge MPs from all parties to support changes to the Finance Bill that will allow family farms to be passed on with confidence rather than fear of an impossible tax burden.

The FUW remains committed to defending the future of Welsh family farming, and we will continue to fight for policies that support - rather than threaten - our rural communities.