Labour has confirmed it has no plans to change inheritance tax, including agricultural property relief, if it wins the next election.
Shadow Defra Secretary Steve Reed confirmed the stance, which has been welcomed by the industry, as APR is currently available on farmland whether used by the owner or a tenant.
Farming groups had warned that if APR was removed, landowners may be deterred from letting their land when they could instead secure business property relief if it were farmed in hand or used for anther trading activity.
NFU President Minette Batters welcomed the news: "It’s good to see Labour has listened to our concerns and recognised the importance of keeping this policy," she said.
“This relief is essential to family farms, helping to keep small family businesses alive and continuing to produce high-quality food while also caring for our cherished countryside.”
Over a third of land is rented in by farmers and around two-thirds of farmers rent in at least some of their land.
The impact of its removal would therefore also be felt across the industry, from tenant farmers and new entrants lacking the capital to buy land, to farms looking for the flexibility to expand.
The NFU warned that any removal of APR would unlikely raise much in the way of tax, but could lead to a contraction in the amount of rental land for farmers.
It said this would then have a wider impact on food security if landowners were to remove their land from tenancies and from food production.
Responding to Labour's stance, NFU head of tax, Michael Parker said: “The return on capital for farming can be very low and would be insufficient to pay a 40% inheritance tax charge.
"This would effectively mean using up all of the profits and remove any ability to invest in the business."
The news follows NFU lobbying earlier in the year on whether APR should be extended to cover all Environmental Land Management schemes (ELMs) following a government consultation on the scope of APR from inheritance tax.
The NFU said it would also be reiterating its ask of the government to remove the uncertainty over the tax treatment of agricultural land entered into environmental schemes ahead of next year’s spring budget.
