Tractor rebellion forces Government U-turn on farm tax

Inheritance tax threshold more than doubled

The Government has backed down after more than a year of farmer protests and raised the inheritance tax threshold on agricultural assets to £2.5 million, more than doubling the original £1 million figure that provoked fury across the countryside.

The change, announced on 23 December, means couples with estates of up to £5 million will now pay no inheritance tax when passing on their assets.

Environment Secretary Emma Reynolds said: “Farmers are at the heart of our food security and environmental stewardship, and I am determined to work with them to secure a profitable future for British farming. We have listened closely to farmers across the country and we are making changes today to protect more ordinary family farms.”

The reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR), first announced at the Autumn Budget 2024, had triggered alarm among farming families who feared being forced to break up holdings to meet tax bills. Under the original proposals, estates worth more than £1 million would have faced an effective tax rate of 20% on agricultural assets above that threshold.

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‘Great British Tractor Rebellion’ pressure campaign

The announcement follows more than a year of protests by farmers, dubbed “The Great British Tractor Rebellion”. Thousands first descended on Parliament Square in London on 19 November 2024, with demonstrators bringing tractors and toy tractors to highlight their opposition.

Further protests followed throughout 2025, including tractor convoys through Whitehall, go-slow protests on major roads and rallies in towns from York to Melton Mowbray. The Metropolitan Police made several arrests as recently as November 2025 when farmers defied a tractor ban during Budget Day demonstrations.

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NFU and landowners welcome concessions

National Farmers Union president Tom Bradshaw said the increased threshold would “come as a huge relief to many” farming families. “After it became clear that this policy wasn’t going anywhere, we have focused our campaign to mitigate the worst of its impacts for the majority,” he said.

The Government estimates that the changes will halve the number of estates claiming APR affected by the reforms in 2026-27, from 375 to 185. Around 85% of estates claiming APR are forecast not to face higher inheritance tax bills as a result of the changes.

Above the £2.5 million threshold, 50% relief will continue to apply to qualifying assets, with inheritance tax payable at an effective rate of 20% rather than the standard 40%. The tax can be paid in equal instalments over 10 years interest-free.

Eleanor Kay, senior policy adviser for Scottish Land & Estates, said: “The Government has listened carefully to the farming community, family businesses and their representatives and has made the right decision. We have long argued that the £1 million threshold was far too low.”

The changes will be introduced through an amendment to the Finance Bill in January and will apply from 6 April 2026. The allowance will be transferable between spouses, including those widowed before the policy was introduced.

The success of the farming campaign offers hope to the shooting community, demonstrating that sustained, united opposition can force the Government to reconsider policies threatening rural traditions.