From April 2026, Inheritance Tax (IHT) relief on business and agricultural assets will be capped at £1 million per estate which may result in many business owners and farmers’ estates subject to IHT. Previously, farming and business assets could qualify for 100% relief allowing farms and businesses to be passed down to the next generation without any tax due.

Under the new regime, assets above the £1 million threshold may attract only 50% relief – effectively subjecting them to a 20% tax rate.

Farmers and business owners will still have their own personal inheritance tax allowances, and a married couple may have up to a £2 million allowance if advice is sought and future planning put in place.

The £1 million allowance is not transferable unlike the personal allowances which means that Wills need to be carefully drafted to ensure that an estate maximises all allowances available.

The options available to families will very much depend on their own circumstances; the ages of those involved in the business, the nature and value of the assets, current borrowing etc. Matters may be more complex than families realise as there are not just tax consequences to consider when estate planning.

We are urging clients who think they may be impacted by the changes to review their affairs well ahead of the rule changes to ensure assets are passed on as efficiently as possible either during lifetime or through a Will.

If you would like to learn more about how the change to Agricultural Property Relief and Business Relief may impact you we are holding a seminar we are hosting a seminar in Ayr at the Western House Hotel on Wednesday 8^th October 2025 at 6pm. Our solicitors will discuss the new rules, planning strategies, and considerations for your family and business. Speakers from a local accountancy firm and financial advisory will also provide guidance. If you would like to attend, please contact Ashley Fleet at enquiries@mckinstry.co.uk or call on 01292 281711.

If you would prefer to speak to a solicitor regarding your affairs please contact us on 01292 281711.

Below is a checklist of matters you may wish to consider before an initial meeting:

• Where are your Title Deeds?
• Do you know how the title to your farm is held? (in your name personally or in the name of the partnership?)
• Do you have a partnership agreement in place? If so, is it up to date?
• Does everyone involved in the business have a Will in place?
• Does everyone involved in the business have a Power of Attorney in place?
• Have you discussed a potential legal rights claims with your solicitor?
• Has anyone involved in the business recently married or separated?