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Posted: 04 August 2025
British farmers are facing major changes to inheritance tax (IHT) rules that could threaten the future of family-owned farms and agricultural businesses. With the UK Government set to scale back long-standing agricultural tax reliefs in 2026, concerns are mounting across the farming sector. In a recent meeting with the Prime Minister, President Donald Trump voiced strong support for British farmers. Urging a rethink of the proposed reforms. Here’s what you need to know. Plus, why now is the time to review your estate planning.
Farmers and agricultural landowners currently benefit from valuable inheritance tax reliefs, which can exempt their estates from IHT. However, from 2026, these 100% tax reliefs will be scrapped for estates valued over £1 million.
– Agricultural Property Relief (APR) applies to farmland and agricultural buildings.
– Business Property Relief (BPR) covers livestock, farm machinery, and other agricultural business assets.
These reliefs are vital for farming families wishing to pass land and assets to the next generation.
Under the new rules, estates will receive:
– £1 million in agricultural or business property relief
– Up to £500,000 in existing ‘non-farming’ estate relief
Any value above those thresholds will be taxed at 20%, a reduction from the usual 40%—but still a major financial burden for many.
The Government estimates this reform will raise £1.765 billion between 2026 and 2030. However, rural communities and farming advocates argue that the consequences could be devastating, especially for an industry already under financial strain.
The farming sector is known for being asset-rich but cash-poor. Farmers warn that these IHT changes may force many to sell their land or assets because the next generation may not be able to cover large inheritance tax bills.
According to the Office for National Statistics, 6,365 agriculture, forestry, and fishing businesses closed in the past year—the highest number since quarterly data collection began in 2017. This highlights growing concern over the future of UK farming and national food security.
With farms potentially being sold or broken up, food production could decline, putting upward pressure on UK food prices. Reduced domestic production could make the UK more reliant on imports, further affecting food security.
During his recent visit, President Trump suggested the UK should reconsider taxing agricultural estates. He emphasised that for many farmers, agriculture is not just a business, but a way of life, and that such punitive taxes could destroy generational farming legacies.
With the 2026 IHT reform approaching. It is strongly recommended that farmers and landowners review their Wills. As well as exploring estate planning strategies to protect their assets and secure the future of their farms.
If you’re concerned about inheritance tax planning or need legal assistance with your estate and succession planning. Please don’t hesitate to contact our Contact our Private client team experts call 01245 493577 or send an email. Our specialists are here to help you navigate these complex changes.
Emma Blakesley specialising in Wills and Probate and is based on our Great Baddow, Chelmsford office. Emma advises clients across all areas of Private Client law, including wills, estate planning, probate and estate administration, Lasting Powers of Attorney, and Court of Protection matters. Known for her thoughtful, client-centred approach, Emma strives to make even complex legal matters feel straightforward and supportive.
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