The Farmers’ Union of Wales (FUW) has responded to correspondence published by Westminster’s Welsh Affairs Committee that suggests more Welsh farmers than had previously been estimated could be impacted by the UK Government's changes to the inheritance tax.

The report, compiled by Jeremy Moody from the Central Association of Agricultural Valuers (CAAV), questions the UK Government’s figures regarding the Chancellor’s plans to reduce the benefit of Agricultural Property Relief (APR) and Business Property Relief (BPR) from Inheritance Tax.

From April 2026, inherited agricultural assets worth more than £1 million, which were previously exempt, will be liable to the tax at 20% - half the usual rate.

The Prime Minister had previously insisted a "vast majority" of farmers will not be affected by the changes, with the Treasury previously claiming it expects around 500 estates across the UK to be affected by the changes each year.

However, this latest research by the CAAV concluded that as a “reasonable estimation”, two hundred taxpayers a year in Wales will now pay tax on the value of their farming businesses - with as many as six thousand taxpayers over a generation.

This report by the CAAV follows warnings by the Farmers’ Union of Wales in their submission to the Welsh Affairs Committee’s call for evidence that previous UK Government figures had underestimated the number of farmers in Wales likely to be affected by the changes.

Commenting, Farmers’ Union of Wales President, Ian Rickman said: “From the start, the FUW has questioned the Treasury’s figures surrounding changes to the inheritance tax, and these findings again confirm a significant proportion of Welsh farmers responsible for Welsh food production and agricultural activity will be adversely affected by the changes to APR.

Given the current and historically low farm profits for the farm types which predominate in Wales, and significant downward pressure on farm incomes due to regulation and changes in support policies, it would appear that in many or most cases such inheritance tax bills would be unaffordable, even when divided over a ten year period, necessitating the sale of large areas of farmland. The subsequent impact on food production, the rural economy, and communities would therefore be far-reaching.

This correspondence again confirms the desperate need for the UK Government to undertake Wales-specific analysis into the possible impact of these changes, with expectation this will allow the UK Government to recognise and review the far-reaching implications of this ill-thought out policy for Welsh farmers.”