What next for the Finance Bill? Read our expert analysis

The Finance Bill has continued its journey through the Houses of Parliament this week, following the surprise government U‑turn announced just before Christmas last year, in which the inheritance tax threshold was raised to £2.5 million for a single owner and £5 million for a married couple.

While the news has brought a sigh of relief to many, the legislation surrounding changes to inheritance tax specifically Agricultural Property Relief (APR) and Business Property Relief (BPR) is still creating difficulties for a significant number of farmers and landowners.

It is helpful to step back and consider the legislative process to understand how a Bill becomes law. This week, the Bill entered Committee Stage, during which MPs examine and debate the legislation line by line and vote on proposed amendments.

Amendments not brought forward by the Government, such as those tabled by the Conservatives or the Liberal Democrats, are extremely difficult to pass. Because the Government holds a parliamentary majority, it can vote down most proposals.

It is rare for non‑government amendments to succeed unless they attract substantial support from Government backbenchers or are quietly accepted by ministers as sensible or necessary. Nonetheless, tabling amendments often provides an opportunity to raise concerns or highlight issues within the legislation.

Several amendments were debated on Monday, including proposals for a one‑year delay to implementation, an anti‑forestalling clause, and a clawback mechanism. None were successful. The only inheritance‑tax‑related amendment to pass was the Government’s own, confirming the previously announced threshold increase.

There will now be a short pause before the Bill enters Report Stage and Third Reading in the House of Commons. These stages allow further amendments to be proposed and represent MPs’ final opportunity to debate the Bill. The CLA is working with opposition MPs to table amendments that would extend the period before inheritance tax must be paid from six months to 12 months, increase relief for woodland areas, and ensure that double‑cab pickups continue to receive tax allowances.

These may appear to be modest changes, but we must be realistic about the political appetite for further adjustments. Labour MPs have indicated that the concession already secured is likely the limit of what the Government is willing to accept. The CLA will, however, continue to campaign for a full reversal of the tax changes in the longer term.

Once the Bill completes its passage through the House of Commons, it will move to the Upper Chamber more commonly known as the House of Lords. Peers may debate and propose changes, but unlike with most legislation, the Lords cannot block a Finance Bill because the Commons holds financial privilege. This principle historically prevented the Lords from obstructing taxation or government spending plans. On the current timeline, the Bill is expected to become law in late March 2026, ahead of the new tax year in April.