UK Inheritance Tax: How Do The Changes Impact The UK Farming Community?

To truly capture the impact of these tax changes, we went beyond financial analysis. We spoke directly with farmers and industry experts to understand their concerns, hear their stories, and explore practical solutions. Our mini-documentary highlights these discussions, offering a first-hand look at the challenges and strategies shaping the future of UK agriculture.

Watch the documentary below to hear directly from Teresa Dunning and the experts who are helping farmers manage these changes.

Our documentary revealed the true extent of concern within the agricultural community. The Farming Community Network (FCN), a voluntary organisation and charity supporting farmers and rural families, has seen a 10% increase in support line calls, with financial stress, family concerns, and mental health being the top three reasons farmers are reaching out. These challenges highlight the pressing need for clear, practical financial advice to help farming families through these significant changes.

In a bid to modernise the tax system and ensure fairness across all sectors, the UK Government has introduced inheritance tax relief changes that specifically affect farms and businesses. These changes, effective from 6 April 2026, will have a significant impact on how agricultural and business property is passed down to the next generation.

Since 1984, farmers and agricultural landowners have benefited from full IHT relief through Agricultural Property Relief (APR) and Business Property Relief (BPR). These provisions have ensured that farming estates, including land, farm buildings, machinery, and diversified farm assets, could pass to the next generation without a tax burden.

However, from 2026, the existing 100% reliefs will end for estates worth more than £1 million. Instead, farms will receive:

• A new capped relief of up to £1 million

• Tax owed beyond this level will be charged at 20%, half the standard IHT rate of 40%

• For jointly owned farms by spouses or civil partners, the relief doubles to £2 million

• Farms gifted to family members at least seven years before death will remain free from IHT

The government argues that this change is necessary to stabilise public finances. However, the National Farmers’ Union (NFU) estimates that nearly 50,000 farm owners may now need urgent financial and tax planning advice.

For farmers with estates exceeding the relief thresholds, these changes could mean a significant increase in inheritance tax liability, potentially forcing families to sell land or assets to meet tax obligations. The ability to claim APR and BPR on farm properties, machinery, and diversified assets such as farm shops or rental cottages will now be subject to stricter limits. This has led to concerns that many long-standing family farms could face serious financial difficulties when transitioning ownership.

While the government has introduced a £5 billion funding package to help farmers with food production and flood recovery, these tax changes could outweigh the benefits for many families relying on inherited land for their livelihoods.

To address these concerns, Hoxton Wealth hosted an insightful event focused on helping UK farmers manage the proposed IHT changes. The event brought together financial experts, tax specialists, and members of the agricultural community to discuss strategies for protecting family legacies and securing farming estates for future generations.

What We Covered:

• The Impact of Tax Changes: A breakdown of the agricultural relief updates scheduled for April 2026 & 2027.

• Tax-Efficient Strategies: Practical approaches that could help landowners and farmers minimise tax exposure.

• Worked Examples: Real-world scenarios demonstrating how to mitigate inheritance tax on personal assets.

The event provided actionable strategies, expert insights, and networking opportunities, helping attendees gain clarity on how to protect their farming businesses and land. 

Teresa Dunning – Wealth Planning Director, Hoxton Wealth

• The impact of post-tax changes scheduled for April 2026 & 2027

• Tax-efficient strategies that are available to everyone, with worked examples of how to mitigate inheritance tax on personal assets.

Gareth Williams – Partner, Price Slater Gawne

• The options for trusts and wills and the role they play in securing farming assets.

• A real-life example of how this has worked and secured land ownership for future generations.

Lindsay Beeston – Director, Afford Bond

• The importance of having the right business structure and what that looks like.

• Real-life client examples showcasing successful advisory strategies.

Mark Routen – Head of Tax, Hoxton Wealth

• Solutions for mitigating inheritance tax (IHT)

• Exploring the potential of corporate structures for long-term planning.

At Hoxton Wealth, we are building a community that goes beyond one-off events. We want to connect with individual farmers who need guidance, as well as local and national farming support groups or networks that can help us bring these critical financial planning discussions to the heart of the farming community.

Book a consultation today with our financial planning and tax consultants to learn more about how we are supporting UK farmers.

Let's work together to protect the future of British farming.