Inheritance Tax change delivers true Christmas cheer for farmers across Northern Ireland

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Westminster has announced that the planned IHT threshold would increase from £1 million to £2.5 million.

This is on top of the change to the spousal transfer allowance, announced by the Chancellor at the most recent Autumn Budget.

This allow those farmers who are married, or have deceased spouses or civil partners, to transfer their inheritance tax allowance to one another if one of them dies having not used their allowance, meaning they will be able to pass on up to £5 million in qualifying agricultural or business assets between them.

The change follows sustained and coordinated lobbying by the UFU alongside the other UK farming unions, supported by members, industry partners and stakeholders, and is expected to help significantly more Northern Ireland farm businesses than was previously the case.

While further detail and analysis are required to fully understand the implications, the UFU says the announcement demonstrates the impact of a united voice across the UK farming industry.

Speaking following the news, UFU president, William Irvine, said:

"The UFU have lobbied tirelessly in opposition to the devastating inheritance tax proposals since they were announced in the 2024 Autumn Budget, and we are very relieved that those efforts were not in vain.

“We've led a unwavering campaign in collaboration with the UK farming unions, highlighting the devastating consequences the IHT changes would have on farming families, especially those here in Northern Ireland with our unique farming structure."

The UFU continuously raised with government how NI will be severely and disproportionately affected by IHT as a result of high land values, an older demographic of farmers and a greater prevalence of sole-owner, livestock-based farms.

"The government's decision to go ahead with the IHT proposals was a shock to us all, but thankfully the sincerity and courage of our farm families who stood up and shared intimate fears for their farm has finally rung through.

"The strength and resilience of our farming community has brought this change and the UFU wish to thank each and every farmer who played their part. We stood as a united force, determined to make a difference, and showed the government that they need to support and protect local food production and farming. It shows what can be done when we work together."

The president confirmed the UFU will continue to lobby for further changes to IHT proposals in the longer term.

He continued:

"We are in a better position today than we were yesterday, and we wish to thank the NI Executive, DAERA Minister, NI MPs and local politicians for their support and assistance.

"But the work is still not done, we will continue to lobby for the full reversal of family farm tax in the longer term. We have made huge progress, but there is more to be done.

"For now, this year has been an immense challenge for our local farmers, and hopefully this news will lift a weight off the shoulders of many families, allowing them to enjoy a peaceful Christmas and a prosperous New Year."

Sinn Féin MLA Declan McAleer has also welcomed news that planned changes to inheritance tax for family farms will be watered down. The West Tyrone MLA said: "This is a positive step forward following months of relentless campaigning by the entire agriculture community. "These changes would have had devastating consequences for our rural communities and economy. "Both at Westminster and here at home, Sinn Féin has stood shoulder to shoulder with other parties and family farms in opposition to these changes. "I want to commend everyone who did not relent and kept pressing for these measures to be reversed. "Sinn Féin will keep speaking up for family farms and work to ensure agriculture policies are fair and proportionate."