Since 1992, agricultural property relief (APR) has meant family farms have been passed down tax-free in a policy intended to bolster food security and keep people on the land. This tax exemption was made because farming is often not a lucrative business, and the work is difficult, so people often do it simply because it is the family business. If farmers sell up, this affects food security. The UK now produces less than 60% of the food its inhabitants eat.
The budget changed this: from 6 April 2026, the full 100% relief from inheritance tax will be restricted to the first £1m of combined agricultural and business property. Above this amount, landowners will pay inheritance tax at a reduced rate of 20%, rather than the standard 40%. This tax can be paid in instalments over 10 years interest free, rather than immediately, as with other types of inheritance tax.
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