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The heir to JCB's vast manufacturing empire has warned Rachel Reeves's Inheritance Tax policy could force the UK-based business to move to America. From April, only the first £2.5m of a business's assets is eligible for tax relief after the owner's death; the rest is taxed at 20%.

But JCB chairman Lord Bamford's son, Jo, says Britain risks losing one of its major success stories to the US due to the US's more favourable tax rates. He said the family tax is a "real problem" and the firm, quite is headquartered in Staffordshire, could "quite easily become an American business".

He told City AM: "I love being in Britain.

"I love being here. I love our factories. But I would say to a political party of any stripe, there's only so much you can ultimately do."

Mr Bamford, who is on the board of the company his grandfather founded in 1945, said JCB could consider leaving Britain due to the inheritance tax levies faced by family businesses under Labour.

The threshold had initially been set £1million, but the Chancellor Rachel Reeves was forced into an embarassing climbdown amid outrage from farmers.

A Treasury spokesperson said: "We've listened and raised the relief threshold to £2.5m to protect more small family businesses, while ensuring the largest make a fair contribution so we can deliver support for families and businesses, including cutting the cost of living."

Both farms and family-run firms had previously benefited from a longstanding carve-out from the unpopular levy in order to allow them to be passed down freely, but were brought into the tax's orbit amid fears it was being abused as a loophole by the super-rich.

The manufacturing scion, whose father donated millions to the Conservative party and is now one of Nigel Farage's most notable corporate backers, said: "When you're hunting down family businesses or farms or any those two things, it is quite contentious, but you want people to hold on to these things long term.

"You want us, as a family, to invest here in Britain. You know, we have businesses everywhere around the world. We have them in India and China and Brazil. I'm here because I'm British and I'm here and I employ people in Britain because I like British people, and I like being in my part of the community."

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