Proactive steps farming families can take to save on IHT

For the farming community it was disappointing not to see any change in the Autumn 2025 Budget to the shock IHT bill that been had announced by the Chancellor in the Autumn 2024 Budget.

There was a small inheritance tax concession for farmers in the Autumn 2025 Budget, one year on from the announcement of a cap on Agricultural Property Relief (APR) and Business Property Relief (BPR) in the Autumn 2024 Budget. Any unused £1million allowance for 100% APR and BPR can be transferred between spouses or civil partners, even if the first death occurred before 6 April 2026 – meaning a combined allowance of £2million for married couples.

But the move is a ‘very slight concession’ that would still leave family businesses and farms facing huge bills when the owner dies.

The £325,000 nil rate band and £175,000 residence nil rate band will remain frozen until April 2031 (possibly meaning fewer beneficiaries as time goes on due to inflation and increases in property values), along with the £1million agricultural property relief and business property relief allowance.

Here is a reminder on the proactive steps farming families can consider and act on before 6 April 2026 to plan and take steps to lessen the financial burden on your family.

Our goal is to save each farming family in Inheritance Tax (IHT) by taking the following steps with us:

Getting an up-to-date Will in place: Ensure your wishes are clearly defined and legally binding.

Establishing a Written Partnership Agreement: Protect your business interests and clarify roles and responsibilities.

Transferring Land: Optimise land ownership for tax efficiency and succession planning.

Considering Discretionary Trusts: They provide flexibility and control over asset distribution.

Gifting to children: Strategically transfer assets to the next generation.

Reviewing Joint Ownership: Assess and adjust ownership structures for Mr. and Mrs.

Setting up Lasting Powers of Attorney (LPAs): Safeguard your decisions in case of incapacity.

The saving can be £200,000, sometimes more, sometimes less.

You will need to seek individual legal advice to work out what the best option(s) for you and your family are.

Planning for the Future

It is more important than ever for you to discuss your plans for the future with the next generation and then work with all your advisers – solicitors, accountants, and land agents – to work out the best strategy for your family. Regular thought and action will be more valuable to you and your family than ever. We would be happy to meet up with you to listen to your personal circumstances and help find the option that suits you and your family the best.

Don't wait until it's too late. Secure your farm's future today.

Contact us to learn more about how we can support you in navigating these critical legal matters. Reach out to Emma Morris, Private Client solicitor and Amy Clarkson, Rural Property law solicitor on 01653 600070 for help and advice if you are involved in a family farming business, your family’s legacy could depend on it.

Let us know if you are a NFU member as you may be able to benefit from the offers they have in place to contribute towards the cost of making or updating documents.