Farming unions have described ‘limited changes’ to inheritance tax plans as ‘insufficient’ adding it will be ‘damaging and destructive’.

In her Budget statement, the Chancellor committed to making the Government’s proposed relief for the first £1 million of agricultural and business assets transferable between spouses.

However, she failed to change course on wider reforms to inheritance tax, meaning many farming families risk facing unaffordable tax bills to inherit the family business.

NFU Cymru President Aled Jones said: “I acknowledge the change announced will help a limited number of farmers, but it does not mitigate the devastating impact of this policy for many.

“In making this change the UK Government is essentially recognising that mistakes have been made in the way in which this policy was designed. I welcome the fact that they appear to be acknowledging these errors, but the step they are taking does not go nearly far enough to reduce the damage that this policy will do to Wales’ family farms, our rural communities, Welsh language and culture.

“Over the last 12-months or so some truly heart-breaking accounts have been shared with me of elderly farmers or those diagnosed with terminal illnesses, who have in good faith arranged their affairs on the basis that their estates would not be subject to inheritance tax. These farmers now find themselves caught in the crosshairs of this policy with no time left for them to make alternative succession arrangements. This acute impact on the elderly and terminally ill remains a huge concern, and for them, in particular, we keep fighting.

“We will continue to work with this large group of Parliamentarians who recognise that the policy the government has chosen is wrong.”

FUW President Ian Rickman said: “Over the past year, the Farmers’ Union of Wales has repeatedly called on the UK Government to reconsider its approach to inheritance tax reform, and has offered practical and credible alternatives.

“From the outset, we have consistently advocated for all tax-free allowances to be fully transferable between spouses, as an absolute minimum measure to safeguard family farms and protect the wider rural economy from irreversible harm.

“The Chancellor’s commitment today to implement this change is therefore a step in the right direction, and one that will help ease the challenges of succession planning for many farming families.

“It is also encouraging to note that the lifetime gifting rules remain unchanged - a mechanism the Union had urged the Treasury to preserve.

“However, her decision to press ahead with the government’s broader proposals for inheritance tax reform remains deeply disappointing, if unsurprising. These changes still risk causing lasting damage to rural communities.

“It is not too late for MPs to support further changes to this unfair and poorly targeted policy. We will keep making the case in Westminster and beyond to protect the future of Welsh family farms. We would urge MPs from all parties to back any amendment to the Budget that would ensure family farms can be passed on with confidence to the next generation.”