So after months of speculation, the Chancellor has announced changes to Agricultural Property Relief and Business Property Relief. These changes will have a significant impact on estate planning for many farms. Five key takeaways:
- Review your succession plan. These changes do not come in until 6 April 2026 so there is time to review, consider, budget, and where appropriate, adapt your plan;
- Make sure you use the full availability of the reliefs on first death. This may mean making changes to your Will as there is no availability to transfer the unused relief to surviving spouse;
- Consider division of assets between individuals and trusts as each will have potentially the availability of the lower rate of relief;
- Where it is appropriate consider making disposals to your successor or into a family trust before the rules change;
- Communicate, Communicate, Communicate – speak to your suite of advisors (lawyer, accountant, land agent) – we are here to advise and assist to mitigate the potential inheritance tax liability and ensure the survival of the farming business into the next generation.
There is no doubt that these changes to Agricultural Property Relief and Business Property Relief will have a detrimental affect on many farms. The key will be to plan and take the right advice now.
100% rate of relief will continue for the first £1 million of combined agricultural and business property to help protect family farms and businesses, and it will be 50% thereafter..