Clause 1

Debate between Ruth Jones and Gareth Davies

Monday 12th January 2026 Commons Chamber

[Gareth Davies]

That is exactly right. I will let the Minister address that point, but let me pay tribute again to my hon. Friend, who has been a forceful champion for farmers across the country and has consistently raised these issues. That goes back to my point about the warnings provided to the Government about the practical implications of the changes, with their impact on family farms in particular. They were ignored until this point. The Minister will have to explain why that was.

Indeed, the Chartered Institute of Taxation has warned that schedule 12’s failure to allow allowances to be allocated to specific property could undermine many wills as currently drafted. This creates a tremendous amount of uncertainty, disputes and real hardship.

Where the cap is exceeded, the first inheritance tax payment will fall just six months after death. If that deadline is missed, the estate will be hit with a punishing interest rate. Within six months, family farms must secure probate, value complex agricultural and business assets, calculate the liability and then raise the cash—often by selling parts of the estate to make the first payment. The NFU has been clear that expecting probate within six months is “unrealistic” given the complexity of valuing agricultural businesses, as my hon. Friend pointed out. In practice, families and personal representatives will miss the deadline—through no fault of their own—without a confirmed tax bill and without the funds to pay for it.

The Government’s expectation is simply unrealistic. The approach is flawed, and the window must be extended. If clause 62 is agreed to and the Government do not finally concede, family farmers and businesses in my community of Lincolnshire and those across the country will not rest until these changes are fully reversed. The only consolation I can offer farmers and businesses watching the votes closely tonight—they will be watching every single one—is that the next Conservative Government will scrap these immoral changes.

[Ruth Jones (Newport West and Islwyn) (Lab)]

I rise to speak on schedule 12. I greatly welcome the Government’s changes to the proposed agricultural property relief and business property relief thresholds. As Chair of the Welsh Affairs Committee, I am proud of the work that my Committee has undertaken on reviewing the Welsh farming industry and the report with clear recommendations that we produced before the Budget. I also thank the Treasury for its swift response to our report as well as the changes that it has made to the thresholds. These changes show that the Government are listening not just to farmers but to the Welsh Affairs Committee and Welsh Labour MPs.

The new higher thresholds are a win for Welsh farmers. Raising the allowance for 100% relief from £1 million to £2.5 million will ensure that the changes to inheritance tax are properly targeted at the wealthiest estates while ensuring that smaller-scale family farms remain protected. Couples will now be able to pass on £5 million-worth of agriculture or business assets between them, tax free. This additional relief will have a particularly significant impact in Wales, given its specific context, which is very different from England. This was a key finding of the Welsh Affairs Committee’s recent inquiry.