Farming unions in Wales have expressed their fears for the future after a Budget that could cause ‘lasting damage’.

Changes to inheritance tax relief could lead to the break-up of family farms and hit investment, they say.

NFU Cymru said: “Misguided and ill-thought-out reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR) will not only lead to lasting damage to Welsh farming and the break-up of family farms, but will also leave farmers with neither the means, confidence nor the incentive to invest in the future of their business.”.

While the Farmers’ Union of Wales expressed grave concerns following the announcement that Agricultural Property Relief (APR) will be reformed from 2026, leaving the future of many Welsh farms in the balance.

NFU Cymru President Aled Jones said: “The changes announced today are not only a threat to our family farm structure and our tenanted sector but also to our nation’s food security.

“The sort of restructuring we are likely to see in response to these changes is likely to mean there will be less land available for tenancies and contracts, the lifeblood of small family farm businesses and a critical point of entry for young and first-time farmers.

“This tax-raid on agricultural property and businesses is misguided and will seriously harm our family farms, rural communities and our ability to produce affordable food for the nation, whilst delivering negligible revenue to the Treasury in terms of overall government spending.

“The changes announced today will see agricultural assets over £1m attract an inheritance tax at a rate of 20% from April 2026, something which will bring the majority of Wales’ family farms into the scope of this tax.

“Just because a family farm may look like a valuable asset on paper, that doesn’t mean those who work it are wealthy and able to meet a large tax bill.”

Responding to the announcement, FUW President, Ian Rickman said: “The FUW has previously warned that changes to the agricultural property relief would have an impact on the viability of family farms and our rural communities - as well as adverse consequential effects for related businesses and employment.

“We know the average size of farm holdings in Wales is around 120 acres - with even conservative estimates of land worth and buildings putting most farms at over £1 million in asset value. 

“Agricultural Property Relief has long played an essential role to ensure those who inherit agricultural holdings are not crippled by taxes when family farms are passed from one generation to the next.

“We await further details regarding APR and what the announcement today means for Welsh Government budgets, but at a challenging period for farming in Wales, this news will add further uncertainty to farm businesses doing their utmost to produce food and enhance the environment.