For farming families, Inheritance Tax can pose a serious threat to the continuity of the family farm. Agricultural Property Relief (APR) is designed to help, but the rules are complex and the government has hinted at reform.
APR provides relief at 100% for land farmed by the owner or a company they control, and 50% for tenanted land. The property must have been occupied for agricultural purposes for at least two years (if farmed by the owner) or seven years (if let to a tenant).
In 2026, the average price of English farmland is approximately £9,500 per acre. A 200-acre farm could therefore be worth nearly £2 million in land alone, before adding buildings, machinery, and livestock.
Without APR, such a farm could face an IHT bill of several hundred thousand pounds — potentially forcing the family to sell land to pay the tax.
APR only covers the 'agricultural value' of the land, not its development value. If your land has planning permission or development potential, the excess value may not be covered by APR.
Succession planning is critical for farming families. Your Will should work alongside any partnership agreements and tenancy arrangements to ensure a smooth transition.
The government has indicated that both APR and Business Relief may be subject to reform. While no changes have been made in 2026, proactive planning is more important than ever. Contact Castle Family Legal for specialist advice.
