When did the changes to Agricultural Property Relief come into effect?
From Monday 6 of April 2026.
Is 100% relief still available for qualifying agricultural assets?
Yes, but only for the first £2.5 million of combined agricultural and business assets. Qualifying agricultural assets worth over that £2.5 million threshold will now only attract 50% relief. There is no cap on the value of qualifying agricultural assets which can attract 50% relief.
Can unused reliefs be transferred to the estate of a surviving spouse or civil partner?
Yes, unused allowances will be transferrable between spouses, so if not all of the £2.5 million allowance is used up following the first the death, the surviving spouse’s estate may be able to benefit from the unused proportion. When combined with the nil rate band and the transferable nil rate band, this means that in certain circumstances, up to £5.65 million of relief may be available on the death of the surviving spouse or civil partner.
If the first death occurred before 6 April 2026 and the surviving spouse or civil partner dies after 6 April 2026, leaving an estate with qualifying agricultural assets, it will be assumed that full £2.5 million allowance will be available to claim by the executors of the surviving spouse or civil partner.
How does it work if my estate has both qualifying agricultural assets and qualifying business assets?
The new £2.5 million allowance applies to the combined value of qualifying assets- there is not a separate £2.5 million allowance available for estates with both agricultural and business assets. If the value of the qualifying property is greater than the available reliefs, the allowances will be applied proportionately.
I made lifetime transfers of qualifying agricultural property prior to the 6th of April 2026. How will the changes to available reliefs affect the Inheritance Tax due on my estate if I were to die within seven years of the lifetime transfer I made?
Lifetime transfers made before 30 October 2024 will not be affected, even if the person who made the gift then dies within seven years of that gift.
However, lifetime transfers made on or after 30 October 2024 could be affected by the changes. If a person who made a gift of qualifying agricultural property on or after 30 October 2024 dies within seven years of that gift, the £2.5 million allowance will apply and if qualifying property worth in excess of £2.5 million was gifted then Inheritance Tax could be payable on that gift following that person’s death.
If Inheritance Tax is payable on agricultural property, when does this tax need to be paid?
Ordinarily, Inheritance Tax is payable on the first day following the end of the sixth month after the date of death and then interest will accrue. But if Inheritance Tax is due on qualifying agricultural or business property relief, it will be possible to pay this in equal annual instalments over 10 years interest-free.
To hear more from our very own agriculture experts on navigating these changes, succession planning and all things farming in a volatile world, listen to this podcast- Farming in a volatile world: P…–The Cereals Podcast – Apple Podcasts.
