Farming in Wales faces “unnecessary uncertainty and confusion” over UK Government plans to reform inheritance tax, MPs have warned.

A report by the cross-party Welsh Affairs Committee, published ahead of this month’s Budget, calls on the Government to pause changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) until a Wales-specific impact assessment has been completed.

The reforms are currently due to take effect in April 2026.

The Committee says the Government’s approach has been complacent, creating an information vacuum and leaving farmers unsure how the changes will affect them. It found that the absence of data concerning the number of farm estates in Wales that might attract inheritance tax created a vacuum which was filled by organisations publishing competing statistics that offered starkly different estimates of the likely impact.

Welsh farming is “at a critical juncture,” the report says. Faced with declining livestock numbers, falling incomes, international competition and mounting financial pressures, the sector is increasingly exposed to risks that threaten its long-term viability.

The Committee highlights the sector’s cultural, environmental and economic importance to Wales, but warns that the UK policy environment too often overlooks the distinct nature of Welsh farming. A greater proportion of Wales’ land area is dedicated to agriculture compared with the UK overall and there is a higher proportion of small, family-run beef and cattle farms than in England, situated in difficult areas which constrain productivity.

In a warning to the UK Government, the report concludes that a failure to account for the unique role farming plays in Wales, risks undermining the viability of rural farming communities, the Welsh language, and the future of farming in Wales.

In addition to its calls to delay inheritance tax reforms, the report makes recommendations relating to agricultural funding, the challenges and opportunities for the Welsh farming industry presented by recent trade agreements and how best to support and secure the next generation of Welsh farmers.

Ruth Jones MP, Chair of the Welsh Affairs Committee, said: “The widespread concern caused by the manner in which a significant tax policy affecting farms in Wales was announced, with a distinct lack of information on the likely consequences in Wales, was the last thing the hard-working people in our farming communities needed at a time when they are already under heavy strain. This complacent approach by the Government is a prime example of how UK policy too often overlooks the distinct nature of the farming sector in Wales, which has its own specific economic and rich cultural characteristics.”

Ms Jones continued: “With the Budget coming up, the UK Government has the chance to demonstrate that it recognises the uniqueness of the sector and its importance to the culture, environment and economy of Wales, and to start building bridges with Welsh farmers. It must hit the brakes on its inheritance tax reforms so a proper comprehensive assessment can be made of the true likely impact on current and future generations living in farming communities across the country.”