IHT & Farms - The Current Position & Latest Changes

Introduction

The Autumn Budget 2024 sent shockwaves through the farming community - with Agricultural and Business Relief for Inheritance Tax (IHT) slashed to 50% from April 2026 subject to the £1million allowance at 100%. This was followed by a U-turn of the £1million spouse allowance in the 2025 Budget and then an increase to £2.5million allowance on 23 December 2025. The IHT position is helped by the 2025 Budget and the transferable spouse allowance, especially now it is £2.5million. The financial landscape is changing fast now that the draft legislation has been published. Full farm succession planning is not just important, but urgent. With the good news of the surviving spouse relief remaining and the £2.5million allowance surviving, the position becomes more complex.

Lifetime transfers were a key strategy, but Capital Gains Tax and funding options, including potential farm sales, must also be addressed. Farm survival still has to be considered with a hit list of sales. Farmers will be producing “hit lists” of possible assets to sell. Following the “mansion tax” it could be large farmhouses sold with PPR. Gain clarity in a time of uncertainty. This full-day course will guide you through the implications of the reduced reliefs, combined with the political unpredictability - including the Reform Party’s pledge for 0% IHT. The need to find out life expectancy to plan with knowledge of the business is of high importance.

Secure your place today and ensure your clients or farm business are prepared for what’s ahead.

What You Will Learn

This course will cover the following:

• Using the £2.5 million allowances to maximise 100% APR and BPR - look to unused allowances from the past from the spouse
• The need for fully updated farm succession planning to consider all eventualities, especially the “empowerment of the spouse” and the impact of the “U-turn”
• The need for farm wills, LPAs and partnership agreements to be updated and dovetail. Maile shows the need for strong Wills in areas of contention on the farm
• Maximising areas of potential 100% APR/BPR restricted to £2.5million (x2)
• Focus on the risks of holding investments resulting in 0% BPR, e.g. Butler, Tanner and Kingsworthy Meadow Fisheries
• AHA tenancy - still 50% APR - more focus on removing tenancies
• Partnership property - still 50% BPR - protection of beneficial interest
• Lifetime gifting for IHT saving - holdover relief remains - the need to understand CGT including rollover relief and protect against GROB (Gifts with Reservation of Benefit) - see Chugtai, and failed PETs (Potentially Exempt Transfers)
• The importance of current and future farm values on all potential liability and all planning, e.g. the impact of ‘AOCs’ etc. as part of understanding liabilities
• Funding the future IHT liabilities in the context of funding end of life care
• The “hit list” of possible assets to sell to fund IHT liabilities including the farmhouse “downsizing” with excellent property advice - thoughts on mansion tax
• Rethinking woodland relief and heritage property in the context of reduced IHT relief
• The impact on potential development land values and sales including compulsory purchase (‘CPO’) proposals on future IHT liabilities
• The need to consider life expectancy in the medical environment
• The increased pressure on the Will and the executor and practical concerns with increased IHT liabilities and funding and the living business on death
• The need to consider the “letter of wishes” for a large number of uncertainties
• All farm succession planning needs updating with the shock 23 December 2025 announcement for the spouse £2.5million allowance