Changes to inheritance tax – what it means for your UK farming business

The 2024 UK Autumn Budget has introduced significant changes to inheritance tax and, specifically, combined business and agricultural property reliefs for UK farming businesses.

Alongside the freeze in the inheritance tax nil rate band of £325,000 until 2030, from April 2026, agricultural property relief will apply up to £1m of combined business and agricultural assets, with a 50% relief on assets above this threshold. This is an effective rate of 20% inheritance tax on assets above the £1m threshold, based on the headline rate of inheritance tax of 40%.The Chancellor stated the new inheritance tax regime would “…help protect family farms and businesses.”  Whilst the industry was expecting some changes to inheritance tax reliefs, the proposals are significantly different from the current system and will affect many family farms. Farming families could now face significant inheritance tax liabilities and may need to consider selling land or parts of the business to cover the inheritance tax.

Need help?

We understand that many farmers will be concerned by the Budget proposals so please speak to one of our experts for more information and advice. You can find contact details in the Our People section of the our website. Alternatively, call 0330 024 0888 or email enquiry@larking-gowen.co.uk.

Bruce Masson