Shropshire Farming Talk: Picking up the pieces of 'devastating' inheritance tax changes
The sight of 18,000 farmers and other interested groups out on the streets of London protesting directly to Westminster just shows the strength of feeling about the changes made in Rachel Reeves’ Budget, which seem to have been made with no long-term thought and no understanding of how the countryside works.
The Budget was pretty devastating for the rural community, but it is important that farming families don’t panic and make hasty decisions that could turn out costly.
Changes to inheritance tax, agricultural property relief and business property relief have undermined the very careful estate planning most farming families have done to protect their farms for future generations, and I would urge all farmers to get good legal advice as soon as possible to make sure that what they have in place is still effective.
APR and BPR have been the cornerstone of generational planning for our rural and estate clients for years, and in one fell swoop the chancellor seems to have forgotten the vital role our farmers play in securing this country’s food security and environmental protections.
From April 2026, APR and BPR will only provide 100 per cent relief on the first £1million of combined assets.
Anything above this level will be eligible for just 50 per cent relief.
This is a massive blow to farming families who are often asset rich but cash poor, and being able to pay this tax in installments over 10 years will only soften the blow, not protect from it.
These changes, coupled with subsidy reductions and a rise in the national minimum wage which were also announced in the Budget, are likely to have a big impact on farming families in the short and longer term.
There was some “good” news in the Budget, as the Farm Recovery Fund - which supports those affected by the extreme weather earlier in the year - has been increased to £60 million.
In the context of everything else, though, it’s small crumbs for the hard-pressed farming community.
It is inevitable that the plight of farmers will disappear from the public conscious as soon as a new issue grabs the headlines, but our agricultural and rural team will remain here working for our clients helping them plot a course through the rough seas ahead.
If you own land or agricultural property and you would like to protect it for your children and their children, please make sure you seek legal advice to protect your most treasured assets.
by Sarah Baugh, who heads the agriculture and rural services team at FBC Manby Bowdler
