With the Budget approaching on Wednesday, 26 November at 12:30pm, pre-Budget chatter suggests the Chancellor could soften inheritance tax (IHT) plans on farm estates. Reports indicate the Treasury is weighing up a significant rise to the proposed agricultural property relief (APR) threshold, currently set at £1 million per individual, £2m for married or civil partners.
One option under review is a higher £5m threshold per person, which, combined with the nil-rate band and spousal rules, could shield more family farms. Officials are also exploring a “minimum share” rule, which could deliver relief up to £5m per person or £10m for couples.
Until now, ministers have resisted changes, arguing that the current APR reforms would raise around £1.6 billion by the end of Parliament in 2029. Under the plan, agricultural IHT would be charged at 20% with a 10-year payment window, unlike standard IHT, which is 40% above the threshold and payable within six months. Farmer groups dispute the Treasury’s estimates of who will be affected.
Any increase in APR would likely need to be revenue-neutral, given limited fiscal headroom and pressure to plug an estimated £30bn gap. The Treasury has kept silent on budget decisions and has declined to comment on fiscal policy before the statement.
Months of protests and marches, from Leeds to Cirencester and the south coast, have kept the issue alive. For now, the sector awaits clarity on 26 November.
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