NFU Cymru warns inheritance tax reforms will have ‘devastating’ ripple effect on rural Wales
NFU Cymru warns inheritance tax reforms will have ‘devastating’ ripple effect on rural Wales
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NFU Cymru has used its time at the Pembrokeshire County Show to intensify its campaign against UK Government inheritance tax reforms, warning that the changes will devastate family farms and damage the wider rural economy.
At a meeting convened at the Haverfordwest Showground, the union argued that reforms to Agricultural Property Relief (APR) will not only burden farming families with unmanageable tax bills but also stall reinvestment in local supply chains.
A HM Treasury 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.”
NFU Cymru Deputy President Abi Reader said the union has fought the plans since they were announced in last year’s autumn budget and urged ministers to reconsider.
“Farmers are in despair that the UK Government is pushing on with its devastating tax raid on small family farms that have, over generations, been the cultural lifeblood of their local communities, driven the local economy and put food on people’s tables,” she said.
“What makes me especially angry is that this flawed policy is going to harm the elderly, the infirm and those who have suffered personal tragedy – many of whom are unable to get their complicated tax affairs in order to meet a bill they could not have planned for.
“These people have dedicated their lives to feeding the nation whilst caring for the countryside. Now, in return, their families will be financially punished and left to foot a tax bill that will, in many cases, render their businesses unviable and stifle any hopes of investment and innovation.”
Among those sharing concerns was 71-year-old dairy farmer Janet Cornock, who runs her Fishguard farm with her son James and his family. Janet had farmed alongside her late husband Gwilym until his death in 2018 and now hopes her grandchildren will continue the business.
She told the meeting that the new tax burden puts the farm’s future in doubt: “Gwilym and I worked hard all our lives and the farm has meant everything to us. We rarely holidayed and rather than spending money on ourselves, we would reinvest it in the business for the children’s future, to pass it on to them.
“We have always been careful with our finances and we’ve paid a significant amount of tax each year on our earnings, as you would expect. But I am so scared about the idea of the family farm tax and what it will do to the farm – I lie awake at night and my heart is pounding.”
Janet said her farm has purchased goods and services from more than 40 local businesses in the past three months, warning that the reforms will “kill reinvestment” and damage the livelihoods of many in the community.
Reader stressed that most farms cannot afford to meet the tax demands without selling assets.
“Farms are unique businesses. The value of our businesses is locked up in our assets and that value is not realised without selling off those assets, which is always at the detriment of the farm’s viability,” she said.
“Most of these businesses are not generating an income that can pay a monumental tax bill, even over a 10-year period. When farmers have made a profit they have typically re-invested that money into the farm business, they simply do not have the cash at hand to pay a tax which less than two years ago they were assured they wouldn’t have to pay.”
While acknowledging government efforts to prevent the use of farmland as a tax-efficient investment, she said genuine family farms are becoming “collateral damage” in a policy that will return little to the Treasury.
NFU Cymru is now urging Secretary of State for Wales Jo Stevens MP to meet with the union to discuss alternatives.
Reader said: “The fears of thousands of families have not been adequately addressed by UK Government and that, to me, is unacceptable. We are urgently calling on the Secretary of State for Wales Jo Stephens MP, the highest elected Welsh member of the UK Government, to meet with us to find a solution that avoids the catastrophic damage lying around the corner for our family farms.”
A UK Government spokesperson said: “Wales Office Ministers have frequently met farmers and unions in Wales, most recently at the Royal Welsh Show, and understand the strength of feeling on the changes to agricultural property relief. The reforms are expected to affect just 500 claims across the UK in 2026-27 with a much smaller number in Wales.
“Our approach is fair and continues support for family farms, while we make the decisions necessary to fund the public services that farmers and families in rural communities rely on.
“The UK Government is backing farmers and in the last Budget we allocated £337m for farm support budgets to Welsh Government in their block grant for the next financial year (25/26). With farming devolved in Wales, it will be for the Welsh Government to decide how to spend that funding.”
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