Budget Resolution No. 50: Inheritance tax (limiting agricultural and business property reliefs etc)

The House of Commons voted on 2 December 2025 to approve Budget Resolution No. 50, which limits agricultural property relief and business property relief for inheritance tax purposes. The resolution passed by 327 votes to 182. The measure, drawn from the October 2025 Budget, caps the combined value of assets qualifying for 100% relief at £1 million per individual, with assets above that threshold attracting inheritance tax at a reduced rate of 20% rather than the standard 40%. Agricultural property relief and business property relief have, since the 1980s, allowed farmers and business owners to pass on qualifying assets free of inheritance tax. The government's change means that farms and family businesses worth more than £1 million in qualifying assets will face a tax liability on death for the first time in decades. Payments can be spread over ten years interest-free, but critics argue the change threatens the viability of multi-generational family farms in particular, since agricultural land is capital-intensive but often generates modest income. The Treasury expects the measure to raise significant revenue, targeting what it describes as the accumulation of very large landholdings sheltered entirely from inheritance tax. The vote divided sharply along party lines. All 283 Labour MPs who voted, joined by all 38 Labour and Co-operative members who voted, backed the government. Every Conservative, Liberal Democrat, SNP, DUP, Plaid Cymru, and Reform UK member who voted did so against, as did three independents and two of the four Green MPs who voted. The near-total opposition unity across parties that rarely agree reflects the breadth of concern about the farming community's response. The policy has attracted sustained media coverage and farmer protests, and subsequent divisions in January 2026 on related Finance (No. 2) Bill clauses show the government continuing to defend the broader Budget package in committee.