New Inheritance Tax Policy for Farmers Could Affect Five Times More Than Treasury Estimates

The Central Association of Agricultural Valuers challenges government figures, warning that 2,500 farms annually may face tax impacts starting in 2026.

The UK Treasury claims its new inheritance tax policy will affect 500 farms annually, but analysis by the Central Association of Agricultural Valuers (CAAV) suggests the figure could be as high as 2,500 per year.
The policy, set to take effect in April 2026, limits 100% tax relief under Agricultural and Business Property Relief (APR and BPR) to the first £1 million of combined land and business value, with an effective tax rate of 20% applied above this threshold.
Critics argue the Treasury's calculations fail to account for farms that claim only Business Property Relief (BPR), as well as other ownership structures such as tenant farmers and family farming companies.
Over a 30-year generational span, the CAAV estimates 75,000 farms could be impacted, raising concerns about the financial viability of many family farms and potential land sales to cover tax liabilities.
Government officials defend the policy, emphasizing that inheritance tax will still be levied at half the standard rate and pointing to broader support for farmers, including a £5 billion farming budget and plans for a 25-year roadmap for the sector.