Inheritance Tax Changes for Farmers What You Need to do Before April 2026
At Chandler Ray Solicitors in Buckingham, we’ve been working closely with the farming community throughout 2025, hosting seminars at Buckingham Golf Club to explain important changes to Inheritance Tax (IHT) that will come into effect at midnight on 5 April 2026.
While the deadline may seem some months away, it’s crucial to start planning now. Any work you need us to undertake will take time to complete so there is a high degree of urgency if changes are to be made before the end of the financial year.
What Has Changed?
In the recent Budget the Chancellor refused to make changes to the severe restrictions to Agricultural Property Relief (APR) and Business Property Relief (BPR) announced in 2024. From April 2026 farmers will be limited to 100% IHT relief on qualifying agricultural and business assets up to £1 million. However:
- Previously, this allowance could not be transferred between spouses or civil partners. If one spouse died and left everything to the other, any unused allowance was lost.
- From April 2026, any unused £1 million allowance will be transferable to a surviving spouse or civil partner, even if the first death occurred before that date.
- This means a surviving spouse can combine both allowances, giving up to £2 million of agricultural/business assets fully exempt from IHT when passed on to the next generation.
Important: This change only applies to spouses or civil partners not to children or other relatives. Beyond this transferable allowance, nothing else has changed in the Budget.
The recent changes only applies to spouses or civil partners not to children or other relatives. Beyond this transferable allowance, nothing else has changed in the Budget.
Why Act Now?
Although the new rules take effect in April 2026, planning ahead is essential. Reviewing your estate structure and making any necessary adjustments will take time, especially for complex farming businesses. It is now urgent if you want to:
- maximize available reliefs.
- avoid unnecessary tax liabilities.
- make sure your succession plans are clear and legally sound.
How We Can Help
Our experienced team at Chandler Ray can guide you through:
- Reviewing your current estate and IHT position.
- Advising on restructuring options to take advantage of the new transferable allowance.
- Preparing documentation and agreements to secure your family’s future.
Get in touch today: Don’t leave it until the last minute start planning today to protect your farm and your family.