Agricultural Property Relief (APR) was widely expected to be changed and has probably been the area I have been asked about the most in the lead up to the Budget.
With a general expectation from the farming community that APR might be completely abolished, the announcements that have been made are not quite so far reaching as some imagined they might be.
From April 2026 the first £1m of agricultural property in an estate will still attract 100% relief from IHT. The remainder of the agricultural assets (land and buildings, live and dead stock, equipment etc) will then receive 50% relief thereafter.
Importantly, it should be noted that the £1m threshold includes not only agricultural assets but also other business assets of an estate i.e. private company shares. This combined threshold may mean that even less of the agricultural assets are able to benefit from the 100% relief.
Taking this into account, the £1m threshold will only fully exempt small farms bringing many farms, that have until now been largely IHT free, into the realms of taxation on death. That being said, the timing of the changes should allow ample time for some IHT planning to take place.
A first step for any landowner should be to obtain a valuation to assess the extent of the potential issue they may face. The team at Randall & Payne can then assist with tax planning around mitigating the impact any future IHT liability.
Nikki Cairns is partner and joint head of accounting services, and has an impressive and diverse portfolio of clients, with a focus on agriculture and hospitality. Contact Nikki by calling 01242 776000 or emailing nicola.cairns@randall-payne.co.uk.
