David Chadwick has again raised concerns over the UK Government’s “family farm tax” in Parliament.

On Wednesday November 26, the Welsh Affairs Committee questioned economic experts on the likely impact of the 2024 Budget on Wales.

Mr Chadwick, Liberal Democrat MP for Brecon, Radnor and Cwm Tawe, told the committee that many farmers has told him they were “simply devastated” by the proposed changes to agricultural property relief (APR).

From April 2026, inherited agricultural assets worth more than £1 million, which were previously exempt, will have to pay inheritance tax at 20 per cent.

Mr Chadwick said that what farmers are finding the toughest is the impact on future generations.

“They’re simply devastated by the fact that their sons and daughters are going to find it harder to run a farm after them,” he said.

He also highlighted that the policy could destabilise the wider rural economy, with the impacts being felt in the agricultural supply chain and impacting the ability to tackle issues like depopulation which are already hitting rural communities hard.

The meeting comes after the Institute for Fiscal Studies (IFS) warned that government changes to agricultural taxes risked treating some landowners unfairly.

A recent analysis by the independent research institute found it generally fair to apply inheritance tax to agricultural assets, including land, in the same way as other taxable assets. However, the report acknowledged that farmers facing the changes could feel particularly aggrieved, as they have fewer opportunities to plan around the new rules.

One specific issue raised by the IFS is that farm owners passing away in the next seven years (but after the changes come into effect in April 2026) will not have had the chance to reduce their liability through lifetime gifts, a strategy available to owners of other assets.

To address this, the IFS suggested the government could make lifetime gifts of agricultural property made before a set future date exempt from inheritance tax, regardless of when the death occurs. This, it argued, would provide parity and ease the transition to the new regime.

The IFS also noted that the proposed reforms, while reducing the tax advantages enjoyed by farmland owners, would still leave agricultural land more lightly taxed than most other assets.

Additionally, the think tank suggested policy refinements, such as allowing unused portions of the £1 million allowance to be inheritable by a spouse or civil partner, to ease the burden on farming families. It also argued that concerns around food production or environmental protection could be better addressed through targeted measures rather than inheritance tax policy.

Commenting after the meeting, Mr Chadwick said: “The Government used the IFS’s statistics to try and justify this disastrous policy. Now that the IFS has changed its mind so should the Government.

“It is very clear to me from what I have heard from local farmers across Mid Wales that this tax would devastate the family farms model and prevent the younger generation from farming.

“Labour needs to swallow their pride; realise the damage this family farm tax will do and axe the tax.”