Farmers from across Wales were in the Senedd’s public gallery to hear a debate on the UK government’s proposed changes to inheritance tax.
The debate called on the Welsh government to make representations to Westminster that it reconsiders and pauses the so-called ‘family farm tax’.
Brought forward by Plaid Cymru, the debate on Wednesday (5 March) called for a thorough consultation and economic review of the policy.
The change to agricultural property relief (APR) from April 2026 will see 100% relief from IHT restricted to the first £1m of combined agricultural and business property.
Above this amount, landowners will pay up to 20% IHT, paid in instalments over 10 years, interest free, and a couple can pass on up to £3m free of inheritance tax.
While decisions around inheritance tax policy are not devolved to Wales, NFU Cymru said it welcomed the airing of this issue in the Senedd.
The union warned that the controversial measures, announced in the autumn budget, risked placing unsustainable tax liabilities on the backbone of Wales' food system.
NFU Cymru president, Aled Jones said: "The UK government risks dismantling a vital sector and causing immense damage to our rural economy, communities as well as our Welsh language and culture."
NFU Cymru's own independent analysis has shown that around 75% of commercial family farms would potentially be impacted by the tax change.
It follows the publication of Wales' latest farm income figures, showing average annual income on an upland cattle and sheep farm to be just £22,200, and £23,000 for lowland cattle and sheep farms.
Because of this, Mr Jones said the IHT policy would be completely unsustainable: "Family farming businesses are therefore, typically, asset rich but cash poor," he noted.
"Without the reliefs currently in place these businesses - which are at the heart of rural communities - will face the invidious prospect of either having to sell all or part of the farm, or to take out borrowings to meet inheritance tax charges.”
In discussions with Welsh government, NFU Cymru has asked for a thorough examination of the impact of the inheritance tax changes on Welsh farming.
The union has also urged the government to reassess the impact of its own current and future agricultural policies, namely the Sustainable Farming Scheme (SFS).
Mr Jones, who watched the debate from the Senedd’s public gallery alongside farmers, said: “The fact that so many have journeyed to Cardiff, in the middle of the busy lambing period, reflects the significant level of concern.
“NFU Cymru has long advocated for policy decisions to be based on sound economic evidence and to support the long-term sustainability of our farming industry, and that remains our position."
