SCOTTISH farmers and crofters have been handed a significant inheritance tax boost after the UK Government agreed to raise the threshold for Agricultural and Business Property Relief.
The change will lift the relief cap from £1 million to £2.5 million per individual, allowing farming couples to pass on assets worth up to £5 million tax-free — a move welcomed by NFU Scotland following months of sustained lobbying.
NFU Scotland president Andrew Connon returned to Westminster this week with the union’s policy team, meeting DEFRA Minister Angela Eagle MP and Scottish MPs to press the case for long-term stability, food security and a viable future for family farms and crofts.
The announcement follows 14 months of campaigning by NFU Scotland alongside other UK farming unions, including direct talks with ministers, formal submissions to Treasury consultations and coordinated grassroots action by farmers across Scotland.
However, the union has warned the change does not go far enough, particularly for family-run farms with complex ownership structures or larger operations that are asset-rich but cash-poor.
NFU Scotland also raised serious concerns about the continued inclusion of an anti-forestalling clause in the Finance Bill, which it says creates moral and practical difficulties for families planning succession.
While the higher threshold will ease some immediate pressure, the union believes the clause remains unfair and unworkable for many farming businesses.
NFU Scotland has confirmed it will continue to push for further reform, with inheritance tax set to remain a key political battleground ahead of the next General Election.
NFU Scotland President Andrew Connon said: The decision to raise the relief threshold reflects the strength of feeling across the industry and the influence of a united farming voice. It is a positive and important development, but it is not a complete solution.
Many family farms remain exposed under the new threshold, particularly those with non-traditional ownership structures. And the anti-forestalling clause remains a serious concern for those trying to plan responsibly for the future.
We are committed to working constructively with all political parties to ensure inheritance tax policy supports the long-term viability of Scottish agriculture and allows family farms to pass on their legacy to the next generation.
NFU Scotland has reaffirmed its commitment to ensuring that taxation policy does not act as a barrier to succession, business continuity or investment. As part of its broader policy programme, the union will continue to engage with UK farming unions, legal and tax experts and parliamentarians to advocate for a fairer, more sustainable future for rural Scotland.
