This article remains as a monument to the uncertainty and stress created by the current labour government. In an announcement on 23rd December 2025, the cap limits have been increased to £2.5m for single persons and £5m for couples. Please read on as to the impact that was caused by the current government before the announcement. It’s a relief for many farmers after the stress caused. When reading this article please substitute any caps with the new figures. The new rules remain a major shake up and may still affect larger farms and estates.
Major changes to Inheritance Tax (IHT) rules are set to take effect from April 2026, following the UK Government’s Autumn Budget announcement in 2024. These reforms will significantly impact estates that include agricultural property, rural land, and family-run businesses—making proactive estate planning more critical than ever.
🔄 What’s Changing?
Currently, Agricultural Property Relief (APR) and Business Property Relief (BPR) can offer up to 100% IHT relief on qualifying assets. From April 2026, the Government intends to revise these reliefs, potentially:
- Capping full relief at £1 million per individual for combined APR and BPR assets.
- Applying only 50% relief on qualifying assets above this threshold.
- Removing relief eligibility for certain shares listed on unregulated or foreign exchanges.
- Making the £1 million allowance non-transferable between spouses or civil partners.
- Refreshing the allowance every 7 years for individuals and 10 years for trusts.
These changes could dramatically increase the inheritance tax liability for estates holding farms, rural properties, or business assets.
💼 Why It Matters
If your estate includes a farm, agricultural land, or a family business, the upcoming reforms could result in a substantial tax bill. In some cases, families may be forced to sell assets to cover the liability
🧩 Planning Strategies to Consider
While selling assets is one option, there are other planning tools worth exploring:
- Lifetime gifting (especially before 30 October 2024)
- Restructuring ownership
- Trust-based estate planning
- Diversifying asset classes
These strategies can be complex and may trigger other tax implications, so professional help is essential.
🏦 How Farm and Country Finance Can Help
At this critical time, Farm and Country Finance is actively supporting customers with restructuring farm finance to help mitigate the impact of these IHT reforms. Whether you’re looking to refinance agricultural assets, restructure business ownership, or explore tax-efficient lending solutions, our team is here to help.
We specialise in:
- Agricultural finance and agricultural mortgages
- Farm mortgages and farm remortgages
- Land mortgages and land finance
- Rural property refinancing
By working with experienced lenders, we aim to help customers protect their legacy and navigate the changing landscape with confidence.
✅ What You Should Do Now
If you’ve already implemented tax-efficient structures, now is the time to review and update your estate plan. Planning tools that work under current legislation may not offer the same protection after April 2026.
Assets most likely to be affected include:
- Farms and agricultural land
- Rural estates
- Family businesses