Inheritance Tax and Farming: Making Sense of the Changes and What You Can Do Now
By Samuel Mather-Holgate
Over the past year, few groups have faced as much uncertainty around inheritance tax (IHT) as farmers and landowners.
Since Labour announced restrictions and reforms affecting Agricultural Property Relief (APR) and Business Property Relief (BPR) in the Budget — followed by consultation, clarification, and back-and-forth — many farming families are left asking the same question:
“What does this actually mean for us?”
If you’re a farmer, landowner, or part of a multi-generational farming family, now is the time to step back from the headlines and focus on clear, practical planning.
Why Farmers Are Suddenly Reviewing Their IHT Position
For decades, farming families have relied on APR and BPR to pass land and businesses down the generations without triggering a crippling inheritance tax bill.
Recent changes — and proposed changes — have introduced uncertainty, including:
Caps on 100% APR/BPR relief
Increased scrutiny of ownership structures
Proposals to bring certain assets into the IHT net
A continued freeze on IHT thresholds until at least 2030/31
Pensions being drawn into IHT planning conversations
While not all proposals are final, the direction of travel is clear:
farming families are being asked to plan more carefully and earlier.
What Farmers Are Searching For Right Now
These are the real questions we’re hearing — and seeing online:
“How does inheritance tax affect farmers?”
“Will my farm be subject to inheritance tax?”
“How does APR and BPR work now?”
“How can farmers reduce inheritance tax?”
“What is the inheritance tax threshold for farms?”
“Should farmers gift land to children?”
“What investments qualify for inheritance tax relief?”
This blog is designed to answer those questions clearly — without jargon or scare tactics.
Understanding the Current IHT Position for Farmers (In Plain English)
The basics still apply:
Inheritance tax is charged at 40% on estates above the available allowances.
Each individual has a £325,000 nil-rate band.
Additional allowances may apply, but thresholds are frozen.
For farmers:
APR can still apply to qualifying agricultural property.
BPR can still apply to qualifying business assets.
However, relief is no longer unlimited, and structure matters more than ever.
This means that assuming everything will be covered by relief is now risky.
Why “Doing Nothing” Is No Longer a Strategy
Historically, many farming families took a wait-and-see approach, assuming reliefs would protect the estate.
Today, that approach can lead to:
Unexpected tax bills
Forced land or asset sales
Family disputes
Loss of control over succession
The biggest risk we see is uncertainty being mistaken for safety.
How We Help Farmers Get Clarity
Our role isn’t to push products or complicated schemes — it’s to help farming families understand their true position.
That usually starts with:
Mapping assets (land, buildings, businesses, pensions, investments)
Identifying which assets qualify for APR and BPR
Stress-testing the estate under different scenarios
Clarifying what would be taxable today
Once the position is clear, planning becomes far easier.
Practical Ways Farmers Can Reduce Inheritance Tax Exposure
Every situation is different, but common planning strategies include:
1️⃣ Using Allowances and Thresholds Properly
Maximising available nil-rate bands
Ensuring spousal allowances aren’t wasted
Coordinating planning across generations
2️⃣ Lifetime Gifting (Where Appropriate)
Using gifting allowances strategically
Understanding the 7-year rule
Avoiding gifts that create cashflow problems
3️⃣ Reviewing Ownership Structures
Partnerships vs companies
Trust considerations
Ensuring structures still qualify for relief
4️⃣ Making Use of IHT-Efficient Investments
Some investments can qualify for Business Relief, potentially falling outside the estate after two years.
These can be useful where:
There is surplus capital
Cash is sitting unproductively
Flexibility is required
(These are not suitable for everyone — advice is essential.)
5️⃣ Pensions as Part of the Plan
With pensions increasingly relevant to IHT discussions, understanding how pension assets sit within an estate is now critical.
Why Specialist Advice Matters More Than Ever
Inheritance tax planning for farmers is not a one-size-fits-all exercise.
It requires:
Understanding farming businesses
Awareness of changing legislation
Coordination with solicitors and accountants
Long-term thinking, not quick fixes
As independent financial advisers, we work alongside other professionals to help families plan with confidence — not fear.
Local Advice, National Expertise
We advise farming families across the UK, and are based in Cricklade, between Swindon and Cirencester, with strong links into the rural and agricultural community across Wiltshire, Somerset, Gloucestershire and beyond.
We offer:
Face-to-face meetings
Home visits
Video calls nationwide
Whether you’re reviewing inheritance tax, succession planning, or the wider financial picture — clarity is the first step.
Frequently Asked Questions
Will farmers still get inheritance tax relief?
Yes, but relief is no longer unlimited and depends on structure, asset type and planning.
Should farmers gift land to reduce inheritance tax?
Sometimes — but gifting without advice can create new risks. It needs careful planning.
Can investments help reduce inheritance tax for farmers?
In some cases, yes. Certain investments may qualify for business relief, but suitability is key.
When should farmers review their IHT position?
Now. Waiting until legislation is final can mean missed opportunities.
Final Thought
There is a lot of noise around inheritance tax and farming right now.
But noise is not the same as clarity.
With the right advice, most farming families still have options, control, and time — provided they act early and plan properly.
If you want to understand where you stand, and what steps are genuinely available to you, we’re here to help.
BOOK A CALL BACK now or fill in our CONTACT US form and get independent financial advice now.
