Farm protests and inheritance tax
Written by Claire Thompson | Wills, Trusts, tax and Probate team | 20 November 2024
The UK government's proposed changes to Agricultural Property Relief (APR) in inheritance tax law have drawn significant attention, sparking both protests and discussions about their impact. Under the reforms, set to begin in April 2026, the 100% relief on agricultural and business property will apply only to the first £1 million of value. Property exceeding this limit will be taxed at 20%, a notable reduction from the standard 40% inheritance tax rate for other estates.
Farmers, particularly those managing family-run operations, argue that the policy could force the sale of farmland to cover tax obligations, jeopardising generational continuity and the industry’s financial health. These concerns come amid a backdrop of declining farm incomes. Critics have also highlighted the challenge posed by the rising value of farmland, which could leave even medium-sized farms exposed as a result of the tax changes.
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However, the government insists the reforms are aimed at higher-value estates and that the majority of farms will remain unaffected. They estimate that three-quarters of farmers will not be affected and argue that the policy seeks to balance fairness with fiscal responsibility while ensuring smaller farms remain exempt.
The issue has galvanised farmers, leading to large-scale protests and a strike. On 19th November, thousands gathered in London for demonstrations, including a procession to Parliament Square led by children on toy tractors. Additionally, a week-long strike in Wales saw farmers withholding meat and crops from supermarkets. These actions reflect broader concerns about food security, rural livelihoods, and the sustainability of British agriculture under current policies.
If you are concerned about changes to agricultural property relief then Nash & Co Solicitors can help.
One way for a married couple to pass their farm on in a tax efficient manner would be to can use discretionary trusts to “lock in” their agricultural allowance on the first death. By transferring part of their estate into a trust, they can maximize inheritance benefits for the next generation while retaining flexibility in the estate's management. These mechanisms highlight ways to preserve family farm assets even under the new rules and could allow married couples with farms up to £3 million to pass these on to the next generation free from inheritance tax.
It also highlights the importance of early planning, to look at ways to pass down ownership in your lifetime to help with both continuity and mitigating taxes.
Regardless of the outcome of these debates, farmers should seize this moment as an opportunity to review their Wills. Changes to inheritance tax rules underscore the importance of clear, up-to-date estate planning to ensure assets are passed on in the most tax-efficient and secure manner. Consulting a professional advisor can help safeguard your legacy and the future of your farm.
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If you think that you might benefit from talking to one of the team about how we can help you to manage things going forwards in a tax efficient way, then please speak to us immediately. You’ll be able to speak to our lawyers immediately, and they can run through your options, answer any questions that you may have, and we can talk about how we `. Jst call us on 01752 827067 or email us at wills@nash.co.uk. We look forward to hearing from you.
