The Tenant Farmers Association (TFA) is urging the Government to accept crucial amendments to its Finance Bill that will be vital to the health of the tenanted sector of agriculture.

Since the changes announced to Agricultural and Business Property Reliefs (APR and BPR) from Inheritance Tax as part of the Chancellor of Exchequer’s first budget in October 2034, the TFA has called for the policy to be finessed to mitigate unintended, negative impacts.

TFA Chief Executive, George Dunn, said: “The TFA is grateful that the Chancellor of the Exchequer has taken on board two of our asks, by allowing spousal transfers of the new combined zero-rate band for APR and BPR and to increase the threshold of that combined band from £1 million-£2.5 million. However, there are two further steps the Government must take to avoid severe damage to the tenanted sector of agriculture.

The first of those steps is to free from tax the inherited value of a joint agricultural tenancy following the death of one of those joint tenants.

“Although the inherited share of an agricultural tenancy will have a theoretical value, it is not a value that can be realised by beneficiaries. Those who inherit a share of a joint tenancy have no means to capitalise on that and will have no way to liquidate the asset in the context of a continuing business to allow them to pay tax. This is inherently unfair and must be addressed by the Government,” said Mr Dunn.

“The TFA is grateful to the Liberal Democrats for tabling a number of amendments to the Bill which would address this unfairness and the TFA urges the Government to accept those amendments when they are debated at Report Stage on Wednesday of this week,” said Mr Dunn.

The second step is to protect and enhance the number of long-term agricultural tenancies which are needed to meet the Government’s wider objectives for the agricultural sector on productivity, profitability and environmental outcomes.

“Sadly, the planned restriction on APR is causing private estates to either remove land from the tenanted sector entirely, or to let only on a short-term basis so that the asset is close to hand if an unexpected tax bill arises,” said Mr Dunn.

“With the Government’s own statistics, issued recently within the DEFRA bulletin on farm rents, showing that the number of Farm Business Tenancies has reduced by 10,000 since 2018 and by 6% between 2024 and 2025, we fear that the changes to APR will accelerate this. It is also somewhat ironic that DEFRA, through the members of its Farm Tenancy Forum, is about to issue guidance on the benefits of long-term agricultural tenancies which will be undermined by the tax changes to be introduced in April,” said Mr Dunn.

“The TFA is grateful to Conservative MPs for tabling a number of amendments which will address these dangers, and we would urge the Government to look positively at them,” said Mr Dunn.

The TFA has written to the Chancellor of the Exchequer to highlight the urgency of these matters.