For many farming families across Wales, the past year has been overshadowed by deep uncertainty. The UK Government’s original proposals to reform inheritance tax, particularly changes to Agricultural Property Relief (APR) and Business Property Relief (BPR), caused widespread anxiety and undermined confidence across the agricultural sector.

Last week’s announcement that the 100% relief threshold for APR and BPR will be increased from £1 million to £2.5 million per individual therefore came as a welcome, if somewhat unexpected, development. Combined with confirmation in last month’s UK Budget that unused reliefs will be transferable between spouses, these changes create an effective £5 million allowance for married couples in farming families. With the reforms expected to take effect from 6 April 2026, many will feel a degree of much-needed relief at a time when it is badly needed.

There is no escaping the fact that the Government’s initial approach caused significant distress. Farming businesses are not simply assets on a balance sheet; they are working, intergenerational enterprises that support families, jobs and the rural economy. The fear that farms could be broken up or sold to meet inheritance tax liabilities struck at the heart of succession planning and cast a long shadow over the future of family farming in Wales.

The FUW has consistently argued for a fairer and more proportionate approach to inheritance tax reform. Over the past year, we have worked hard to explain the real-life implications of these proposals to Ministers and officials, as have opposition parties, cross-party parliamentary committees, the public, and a growing number of the Government’s own MPs.

While these revised thresholds do not erase the frustration felt over the way the reforms were handled, they do provide much-needed breathing space for many farming families. We are, however, still working through the details of what these changes will mean in practice, and the FUW will continue to engage closely with the UK Government in the new year to ensure the final framework works for family farms. At a time when Welsh agriculture is already facing increased uncertainty, restoring confidence is essential.

As we enter a new year, there is an opportunity to move forward more constructively. The inheritance tax debate has shown how crucial early engagement and a proper understanding of farming are to policymaking, particularly when decisions affect family businesses and rural communities so profoundly. The FUW hopes these lessons are carried into the year ahead, helping to rebuild trust and deliver greater stability for Welsh agriculture.