Dairy Farming: Inheritance Tax

The Government believes its reforms to agricultural property relief and business property relief from 6 April 2026 gets the balance right between supporting farms and fixing the public finances in a fair way. The reforms reduce the inheritance tax advantages available to owners of agricultural and business assets, but still mean those assets will be taxed at a much lower effective rate than most other assets. Despite a tough fiscal context, the Government will maintain very significant levels of relief from inheritance tax beyond what is available to others and compared to the position before 1992.

The reforms are expected to result in up to 520 estates claiming agricultural property relief, including those also claiming business property relief, in 2026-27 paying more inheritance tax. This means almost three-quarters of estates claiming agricultural property relief, including those that also claim for business property relief, will not pay any more tax as a result of the changes in 2026-27, based on the latest available data.

In accordance with standard practice, a tax information and impact note will be published alongside the draft legislation before the relevant Finance Bill.