Government proposals to tax inherited farmland have been significantly watered down, with the threshold set to rise from £1 million to £2.5 million, a move that has been warmly welcomed across Fermanagh’s farming community.
Fermanagh South Tyrone MP Pat Cullen has welcomed today’s announcement that the inheritance tax relief threshold for agricultural and business property will increase to £2.5 million from April 2026, describing it as an important step for local family farms and rural businesses.
“This is a significant and positive step for family farms and rural businesses, many of which have been under immense pressure from rising costs, uncertainty, and the long-standing threat that inheritance tax poses to generational succession,” she said.
“For too long, families have lived with the fear that farms built up over generations could be broken up simply to meet a tax bill.”
Mrs Cullen confirmed she wrote to the Chancellor earlier this year demanding urgent action to protect family farms and to recognise the vital role they play in sustaining the rural economy, local employment and food security. She said she was pleased these concerns had been acknowledged and acted upon.
“While I believe the strongest and fairest approach would have been the complete abolition of inheritance tax on family farms and rural businesses, this announcement represents a meaningful and welcome start,” she said.
“Allowing spouses and civil partners to pass on up to £5 million in qualifying agricultural or business assets between them provides greater certainty and breathing space for farming families planning for the future.
“I will continue to press the government to go further and to ensure that future policy decisions genuinely support those who live and work in rural communities and reflect the reality on the ground for farmers and small businesses.”
The revised threshold will apply from April 2026 and will see the Agricultural and Business Property Reliefs limit increase from £1 million to £2.5 million, easing concerns that farms could be forced to sell land to meet inheritance tax bills.
The Livestock and Meat Commission (LMC) Chief Executive Colin Smith said the announcement would come as welcome news to farming families across Northern Ireland, including many in Fermanagh where family-run farms form the backbone of the rural economy.
“Confirmation that the Agricultural and Business Property Reliefs threshold will be increased from £1m to £2.5m when it is introduced in April 2026, will come as welcome news to farming families across Northern Ireland (NI),” he said. “The anguish that this policy has created within the farming community has been widely publicised. Family farms are the part of the fabric of NI, making significant contributions to the economy, environment and society. It is imperative that they are safeguarded and allowed to prosper for generations to come.”
While noting disappointment that the tax will still exist, Mr Smith said the increase represents a positive step.
“While it is unfortunate that this tax will still exist, raising the threshold is a positive step which will reduce the burden on farm families,” he said. “This change has come about thanks to the sustained and collective efforts of farmers, farming lobby groups and politicians who relentlessly emphasised the detrimental impact this policy would have on farm businesses and ultimately livelihoods.”
He added: “This was one of the major challenges characterising 2025 and locally I recognise the significant efforts of the Ulster Farmers’ Union in campaigning for this change.”
The increase in the inheritance tax threshold is expected to bring reassurance to many farming families in Fermanagh, where succession planning has become an increasing concern amid rising land values and ongoing financial pressures.
