We explain, in plain language, what the April 2026 changes mean for land-owning families.
Since 1984 reliefs helped keep farms intact across generations. From April 2026, reliefs will change, and a new £1m allowance will alter how much levy applies above that cap.
We set out why this has moved from a future task to a “do it this year” priority. Our aim is simple: protect the land and the business so the next generation can carry on without forced sales or splits.
This short guide is a buyer’s map. It helps you turn up to meetings with solicitors and advisers with clear questions, the right paperwork and a practical brief.
We cover who this affects — owner-occupiers, tenant operators, family partnerships and mixed estates — and what you’ll learn about allowances, wills, lifetime gifting and insurance as a funding option.
For local support and detailed advice see our guide on inheritance tax planning for farmers uk.
Key Takeaways
- April 2026 reduces reliefs and adds a £1m per-person allowance.
- Acting this year can reduce the chance of a forced sale or split.
- Our guide helps you prepare for solicitor and adviser meetings.
- The core goal is keeping the farm and land within the family and for the next generation.
- Every estate is different — professional advice is essential.
Why April 2026 changes make farm inheritance tax planning urgent
April 2026 brings changes that make prompt action essential for many rural estates.
What APR and BPR aimed to protect
When agricultural property relief and business property relief began, the idea was simple. They stopped working farms being carved up to meet a bill and encouraged land to stay in productive use.
What changes from April 2026 and why liability rises
From April 2026, only the first £1m per person of qualifying APR/BPR keeps 100% relief. Amounts above that get 50% relief. That means a 40% levy on the full value turns into an effective 20% charge on the excess.
Put simply: if a parcel of land or buildings sits above the cap, the cash call at death can become real rather than theoretical.
Which assets could be affected
Typical assets to review include land, the farmhouse and other property, farm buildings, machinery and livestock. Valuation and ownership structure decide eligibility and the resulting liability.
- Land and farmhouses often hold most value and risk.
- Machinery and equipment may or may not qualify depending on use.
- How assets sit between spouses or partners alters the outcome.
We walk clients through these practical points and link to more detail on agricultural property relief and woodland relief. Acting now gives you options that shrink as values move closer to the April 2026 change date.
Inheritance tax planning for farmers uk: how the new £1m APR/BPR allowance works
A new £1m cap reshapes how agricultural and business reliefs protect land at death. We explain the mechanics so you can see the cash effect and practical choices.
The £1m per person allowance and the 50% relief above the cap
The first £1m of qualifying agricultural property or business property keeps 100% relief. Value above £1m gets only 50% relief, which creates a real tax charge on the excess.
Why the allowance is lost if unused and cannot pass to a spouse
This allowance does not transfer. If the first to die does not use their £1m, it is lost. Spouse transfers remain exempt, but they can waste the first-death allowance.
How couples can use two allowances and when spouse exemption may cost more
Careful wills can let couples use both allowances so up to £2m passes free of charge to the next generation. But simply shifting everything to a spouse can be less efficient for long-term succession.
- Repeatable kitchen-table phrase: first slice 100% relieved; next slice 50% relieved.
- Estimate the potential tax hit and include cash-flow in estate planning decisions.
| Scenario | Value | Relief |
|---|---|---|
| Single estate under £1m | £900,000 | 100% relieved |
| Single estate £1.5m | £1,500,000 | £1m relieved; £500,000 at 50% relief |
| Couple using wills | £2m | £2m relieved if structured correctly |
Buyer’s guide to will and succession planning strategies for farming families
Many landowning families face a fresh dilemma: wills drafted under old rules may not do what you expect.
Start with a quick check. If your will dates from before October 2024, it may assume full APR/BPR relief. That assumption can create an avoidable charge on death.
Locking an allowance with targeted legacies
Leaving a named legacy to children or grandchildren can use a partner’s £1m allowance on first death. This keeps value within the family while preserving income for the survivor when needed.
Rebalancing ownership between spouses
Moving qualifying assets now can let each spouse use their own allowance later. Spousal transfers are often CGT-exempt and can be a practical step to reduce future liability.
Aligning wills with business structures
Make sure wills match partnership agreements and company articles. Misalignment can cause delays and disputes. We advise bringing agreements and valuations to any meeting.
When trusts support control and fairness
Trusts can protect the farm where there are young beneficiaries, a second marriage or vulnerable relatives. They help keep control while allowing use and benefit.
“Prepare a clear timeline, set meeting goals and bring titles, accounts and a family tree.”
- Set meeting goals and a timeline.
- Bring wills, partnership deeds and valuations.
- Discuss fairness between non-farming children and the next generation.
| Action | Why it matters | When to do it |
|---|---|---|
| Review wills dated before Oct 2024 | May assume full relief and misallocate allowance | As soon as possible |
| Leave targeted legacy to children/grandchildren | Uses first-death £1m allowance | When wills are updated |
| Rebalance ownership to spouse | Allows use of both allowances later | After legal and tax advice |
| Consider trusts | Protects control and manages fairness | When beneficiaries are complex |
For a practical checklist to take to advisers, see our farm succession checklist. Seek professional advice from a solicitor with an agricultural specialism.
Lifetime planning options: gifting the farm, the seven-year rule and transitional timing
Gifting land can remove value from your estate, but it starts a seven-year clock and brings practical trade-offs. We set out the key points so you can judge whether giving now makes sense for your family and the business.
Potentially Exempt Transfers (PETs)
A gift of agricultural property can be a PET. If you survive seven years after the gift, the asset normally falls outside the estate and no charge applies. That makes lifetime moves a clear route to reduce future liability.
Taper relief and death within seven years
If death happens inside the seven-year window, a sliding scale of relief applies. After three years taper relief begins to reduce the charge. The nearer to seven years you get, the lower the eventual bill.
Transitional rules from 30 October 2024
Gifts made on or after 30 October 2024 may still face the new £1m cap if death occurs on or after 6 April 2026 within seven years. That timing can affect how much relief the gift achieves and what liability remains.
Capital Gains considerations
Remember CGT. Gift Hold-Over Relief can defer gains in qualifying cases so a lifetime gift does not trigger an immediate capital charge. Always check whether hold-over relief applies before assuming a net benefit.
Control versus certainty: giving ownership away changes who can sell or borrow against the land. We recommend mapping your situation with valuations and records and discussing outcomes with an adviser.
For practical steps on exempt gifts and how they work in action see our guide on protecting your family’s assets with exempt.
Managing the cash cost: life insurance and funding potential tax bills
Even well-structured transfers can leave a short-term bill that needs a sensible funding solution. Farms often hold value in land, not cash. That can create a real liquidity gap.
Seven-year term cover
A seven-year term policy can protect against the charge on gifts while the seven-year clock runs. For example, gifting a £5m farm with £1m exempt leaves £4m potentially chargeable. At an effective 20% that creates an initial liability of about £800,000 if death occurs soon after the gift.
Fixed-term and whole-of-life options
Fixed-term cover suits those who plan gifts soon. Whole-of-life cover helps when giving isn’t practical because parents still rely on the farm income or want to retain the house.
Keeping cover aligned with rising value
Policies can be inflation-linked or stepped to track land value. Regular reviews stop cover becoming too small.
| Option | When it helps | Indicative cost |
|---|---|---|
| 7-year term | After a lifetime gift | Example: £800,000 cover — premiums vary (indicative only) |
| Fixed-term to age | When timing is known | Monthly premiums for younger clients may be modest |
| Whole-of-life | When gifting is not yet possible | Higher long-term cost but guaranteed payout |
Buyer’s questions: who should own the policy, how proceeds will be paid, and how cover sits with wills and trusts. We recommend taking these to a specialist adviser. Insurance is a cash cushion — not a replacement for proper estate work.
Conclusion
A clear, practical response now will keep options open for the farm and the next generation.
From April 2026 the relief landscape changes and that makes active review essential. Use both partners’ allowances with carefully drafted wills, consider sensible lifetime gifts and align succession with the business structure.
Doing nothing is still a decision. It can raise the estate levy and reduce choices when the family most needs them.
Simple next steps: check the date on your will, gather valuations and deeds, map asset ownership and book time with an agricultural specialist solicitor and adviser. If you want local guidance, see our short guide to secure your family’s future.
Good planning protects people as much as it saves money. Keep conversations open, document decisions, and get specialist advice tailored to your holding.