NFU Cymru along with the NFU, NFU Scotland and the Ulster Farmers’ Union has written a joint letter to the Chancellor of the Exchequer Rachel Reeves following recent speculation that Inheritance Tax Reliefs (IHT), including Agricultural Property Relief (APR) as well as Business Property Relief (BPR), are to be reviewed in this week’s Budget.

Commenting on the letter, NFU Cymru President Aled Jones said: “There has been some speculation that there could be changes to the Inheritance Tax treatment of agricultural property.

"NFU Cymru is very much alive to this and has been working on this issue for some time, having written to all Welsh MPs and the Chancellor on this matter at the beginning of the month, and having raised and discussed the issue with numerous MPs over the last few weeks.

“Following further speculation about possible changes to inheritance tax in recent days, the four UK NFUs have now penned a joint letter to the Chancellor, Rachel Reeves, setting out why these reliefs, which are crucial to the viability of farm businesses, should be kept in place.

"The recent speculation, if correct, is very concerning, as we know that APR and BPR are key to preserving family farms as viable small businesses when they are passed down the generations.

“Returns from farming are often extremely modest, with the return on capital employed for farming, after taking into account a wage for the farmer, averaging less than 1%.

"This means that the vast majority of farm owners would be unable to meet any IHT charge, even utilising the entire return on capital made during the whole period of ownership. My great worry is that such changes would force the break-up of farms, something which would be devastating for Wales’ family farm structure and the wider rural community.

“The removal or reform of APR would also mean that many landowners, large or small would no longer be incentivised to ensure their land is farmed, something which is often done by way of farm tenancies.

"My fear is the very real risk that the reform of APR will cause a significant contraction of farmland being made available for tenancies or contracts, which is often the lifeblood of small family farm businesses and a critical entry point for young and first-time farmers. "With around 30% of agricultural land in Wales rented, it is clear that any change to APR could impact a huge number of farm businesses and their ongoing viability."

Changes to APR and BPR were also high on the agenda for NFU Cymru’s Rural Affairs Board, which discussed the rumoured changes the previous day.