Following a sustained campaign by the National Farmers' Union (NFU), the government has confirmed that the inheritance tax threshold for agricultural and business assets will rise to £2.5 million when new rules take effect in April 2026.
NFU President Tom Bradshaw said the increase, up from the previous £1 million threshold, "will come as a huge relief to many" family farms, significantly reducing their potential tax burden. The announcement follows 14 months of lobbying aimed at mitigating the impact of proposed changes to Agricultural Property Relief (APR) and Business Property Relief (BPR), which had initially risked a 20% tax on agricultural assets above £1 million.
In addition, changes to the spousal transfer allowance announced in the Autumn Budget will allow married couples and civil partners to transfer unused inheritance tax allowances, enabling up to £5 million in qualifying assets to pass between them. Assets above the new £2.5 million threshold will continue to receive 50% relief.
Bradshaw praised government engagement, highlighting constructive meetings with Prime Minister Sir Keir Starmer and Defra Secretary Emma Reynolds. Reynolds emphasized the government's commitment to protecting family farms while ensuring larger estates contribute fairly.
The combined measures are seen as a major victory for the farming community, safeguarding the future of family-owned farms and supporting both agricultural continuity and rural livelihoods.
Source: www.nfuonline.com
