Planning for your agricultural business’s future

Running a business not only means thinking about the day to day, but also the future of your business.

Why should I plan?

HMRC announced that from 6 April 2026 there would no longer be relief on the full 100% of agricultural land and property for inheritance tax, but instead only on the first £1million. This is set to have a great impact on farmers throughout the UK with many business owners considering what this means for the future of their business.

With this new legislation coming in within the year, it is worthwhile considering the succession of your business, if you haven’t already, and how to maximise the £1million APR allowance.

What should I consider when planning?

There are many risks when considering succession planning. If you are intending on gifting some of your land and property it is important to consider when inheritance tax (IHT) would be chargeable on the gift. If you were to gift land into a trust, it would become chargeable to IHT immediately, however if you were to gift land to another individual this would have the potential to be exempt providing you survived the gift by 7 years.

Another thing to consider when gifting ownership of your business is whether you will remain to benefit from the land/property once you’ve gifted it. If so, this would be seen as a gift with reservation of benefit, which means the land/property you are still benefiting from will still be included in your estate upon death. You might find this if you gift your farmhouse to your successor but remain to live in it or, you gift your land to another partner in full but still remain to receive profits from the partnership. This is an unfortunate repercussion of gifting for IHT and must be planned carefully to make it worthwhile.

What should I do now?

We understand that these can be complicated and difficult decisions. Do you act now and it be too early? Do you wait and it ends up being too late to benefit? The future cannot be predicted but the best advice we can give is to consider your options and plan in advance. We are here to help provide you with expert guidance to what is best for you and your business.

It is important and necessary in the world we are living in today to bear in mind that legislation changes frequently and, when you are planning ahead, every eventuality cannot be captured, however you can plan for the best.