Source · Select Committees · Welsh Affairs Committee
2nd Report - Farming in Wales in 2025: Challenges and Opportunities
Welsh Affairs Committee
HC 785
Published 12 November 2025
Government response
1st Special Report – Farming in Wales in 2025: Challenges and Opportunities: Government Response · published 30 Jan 2026
Recommendations & Conclusions
4
Conclusion
Accepted in Part
Farm valuation-based IHT impact assessments are limited and potentially misleading.
Conclusion
Impact Assessments based on farm valuations may offer a general indication of how many farms could potentially exceed the £1 million Inheritance Tax (IHT) threshold, however such assessments are limited. Without access to detailed information on individual farm circumstances, such …
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Government Response Summary
The government acknowledges concerns by increasing the 100% relief allowance for agricultural property relief from £1 million to £2.5 million, allowing couples to pass on up to £5 million tax-free, and refers to a published note detailing the reforms.
Wales Office
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6
Conclusion
Accepted in Part
Policy change creates disproportionate impact on elderly and terminally ill Welsh farmers.
Conclusion
We are also concerned that the change in policy may have a disproportionate impact on elderly farmers or those with terminal illness who have arranged their affairs on the basis that their estates would not be subject to IHT, and …
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Government Response Summary
The government acknowledges concerns by increasing the 100% relief allowance for agricultural property relief from £1 million to £2.5 million, allowing couples to pass on up to £5 million tax-free, following feedback from the farming community.
Wales Office
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15
Recommendation
Accepted in Part
Intensify efforts to establish UK-EU SPS zone and publish a roadmap by May 2026.
Recommendation
The UK Government must intensify efforts to fully establish an SPS zone with the EU, as a key step towards reducing trade friction for Welsh agricultural exports. We call on the Government to publish a roadmap for how they plan …
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Government Response Summary
The government states it is committed to working with the EU to advance an SPS agreement, describing it as a central element of their work to reduce agri-food trade friction and cut costs. However, the response does not commit to publishing a roadmap for how they plan to establish the SPS zone by May 2026.
Wales Office
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