Proactive steps farming families can take to save on IHT

It was positive to see the Government’ announcement on 23 December 2025 that the level Business and Agricultural Property Relief 100% threshold will increase to be £2.5 million when it is introduced from 6 April 2026.

One year on from the announcement of a cap on Agricultural Property Relief (APR) and Business Relief (BR) in the Autumn 2024 Budget there had been a small inheritance tax concession in the Autumn 2025 Budget when the government announced the 100% relief may be transferred from one spouse to the survivor after the first death. The announcement on 23 December 2025 now means that any unused £2.5 million allowance for 100% APR and BR can be transferred between spouses or civil partners, even if the first death occurred before 6 April 2026 – meaning a combined allowance of £5 million for married couples in addition to the usual transferable Nil Rate Band.

The £325,000 Nil Rate Band and £175,000 residence Nil Rate Band will remain frozen until April 2031 along with the £2.5 million agricultural property relief and business property relief allowance. This means tax payments will increase as time goes on due to inflation and increases in property values.

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.  You may lose all Agricultural and Business Property Reliefs if this is not up-to-date.

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

Review your use of assets:  Make sure the use will qualify for BR or APR.

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 with your spouse.

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

IHT savings could be very significant.

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. Contact 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.