The government slipped out an unexpected tax announcement in late December, just as most people were turning their attention elsewhere.
The old political adage about choosing “a good day to bury bad news” still feels relevant. More than twenty years on, the UK government’s approach to communication often seems to obscure uncomfortable developments rather than illuminate them.
December offered two clear examples. On the 18th, the final parliamentary day before recess, the government released thirteen written ministerial statements. Among them was a long delayed DEFRA publication: Baroness Minette Batters’ review into farm profitability. Then, five days later, with MPs already away from Westminster, DEFRA, HM Treasury and the Department for Business and Trade quietly issued a joint statement announcing a significant shift in the new inheritance tax (IHT) rules for farms and businesses.
For those who did spot it, the announcement was striking because it revised a key figure in the Finance Bill published less than three weeks earlier. That Bill formed part of the agricultural and business IHT relief reforms outlined in the Autumn 2024 Budget:
- At present, there is no cap on 100% relief.
- The original proposal introduced a £1 million combined limit on 100% agricultural and business relief from 6 April 2026.
- Any value above that limit would attract 50% relief.
- No transferability between spouses or civil partners was included.
The transferability issue was quietly corrected in the Autumn 2025 Budget. Then, just before Christmas, the government raised the relief ceiling to £2.5 million. Together, these changes mean that a couple could, in principle, pass on a £5 million family farm or business to their children without incurring IHT. Anyone who had already taken steps based on the Chancellor’s 2024 proposals may now find that effort, and cost, was unnecessary.
Meanwhile, another major IHT reform from the Autumn 2024 Budget remains untouched: the plan to bring pension death benefits into the IHT system from April 2027. This measure is expected to raise more revenue than the relief changes ever would. But unlike the agricultural reforms, it has not attracted strong lobbying, making a lastminute reversal in Christmas 2026 far less likely.
Tax treatment depends on individual circumstances and may change in future.
The Financial Conduct Authority does not regulate tax advice.
23rd January 2026
