The UK government has conceded proposals to reform inheritance tax reliefs for agricultural land and business assets. The threshold for inheritance tax on agricultural or business assets will be set at £ 2.5 million instead of £1 million. Married couples will now be able to pass on up to £5 million in qualifying agricultural or business assets before inheritance tax is applied.
The move will reduce the burden on many smaller and medium-sized farms. However, some family farms with high land and machinery values and tight margins will still face pressure. It will also continue to discourage some from investing and expanding their businesses.
Those campaigning against the proposed changes have welcomed the concession. But according to Gavin Lane of the CLA:
“This announcement only limits the damage – it doesn’t eradicate it entirely. Many family businesses will own enough expensive machinery and land to be valued above the threshold, yet still operate on such narrow profit margins that this tax burden remains unaffordable.”
Thus, the year has ended with some good news for the UK farm sector. Wishing all our clients and subscribers a Merry Christmas and a prosperous 2026.
Jonathan