Farming Life quotes Sarah Wray on the reform of Agricultural Property Relief announced in the UK Budget and the impact on farmers and landowners
Agricultural property relief is set to be 'severely curtailed' after the government announced reform of the tax relief in today's autumn budget.
Chancellor Rachel Reeves outlined that assets over £1 million will get a 50% relief, with an effective rate of inheritance tax at 20%.
A £1m allowance - seemingly shared with business property - of 100% relief is being rolled out in April 2026, and assets in excess of this will only benefit from 50% relief.
The chancellor announced no relief changes to assets under £1 million.
Sarah Wray, Senior Associate, comments on the announcement:
Reform of Agricultural Property Relief (APR) announced in the Budget today will raise significant concern for farmers and landowners. APR will be severely curtailed. A £1m allowance (seemingly shared with business property) of 100% relief is being introduced from April 2026, and assets in excess of this allowance will only benefit from 50% relief.
Given land values, the impact of this reform will be felt throughout the sector; even small farms are very likely to face an inheritance bill from April 2026. In the short term we’re likely to see individuals with agricultural property seeking to "bank" the current (much more generous) reliefs whilst they still apply by transferring it into trust, or onto the next generation.
The Spring Budget also promised to extend APR to environmental schemes. This was seen as a key development in incentivising activities which support the UK’s climate targets, but now its future remains unclear in light of these significant reforms and their wide economic implications for the farming sector.
Read the full piece in Farming Life here.
