 has long sat at the heart of succession planning for farming families. For decades, it allowed agricultural land, buildings and associated assets to pass between generations with little or no 

, helping farms remain intact rather than being broken up to meet tax liabilities 

. As a result, many families came to see APR as a permanent fixture of the landscape, something that worked quietly in the background and rarely needed revisiting.

Agricultural Relief for Inheritance Tax

That sense of certainty has now shifted. While recent lobbying has softened the government’s original proposals, APR can no longer be treated as a passive or automatic protection. Instead, it requires a more deliberate understanding of asset values, ownership structures and long-term planning. The relief still exists and remains valuable, but families are being asked to engage with it in a way they have not needed to for decades.

To explore what these changes mean in practice, we spoke with 

, whose work focuses on complex rural estates and long-term intergenerational planning.

What APR Covers and What It No Longer Quietly Ignores

APR is often spoken about as a single, standalone relief, but in reality it operates alongside 

, and the distinction between the two is increasingly important. Together, they form the backbone of inheritance planning for most farming businesses 

IHT Business and Agricultural property reliefs are changing

“As you’d expect, APR covers agricultural land and farm buildings,” Tom explains. “But in a farming context, we can also bring in business property relief, which can apply to machinery, livestock and certain diversification activities like farm shops or holiday lets.”

It is this combined framework that determines how much of a farm’s overall value can pass between generations without triggering inheritance tax. Under the revised proposals, which are due to take effect from April 2026, the government will introduce a cap on the total value of qualifying assets that can pass free of inheritance tax. Following recent amendments, that cap now stands at £2.5 million per individual, and importantly, it can be transferred between spouses.

“In practical terms,” Tom says, “for a typical family farm, assets up to around £5 million could pass free of inheritance tax. Anything above that level is taxed at an effective rate of 20%, rather than the usual 40%.”

The Thresholds Have Moved, But the Pressure Hasn’t Disappeared

At first glance, the revised thresholds appear generous, and in many cases they will protect smaller farms from any immediate 

 exposure. However, Tom is clear that this does not remove the challenge for a significant number of working agricultural businesses.

“Agricultural businesses are often very asset-rich but quite cash-poor,” he explains 

. “So even a reduced inheritance tax bill can feel very significant if it hasn’t been planned for.”

Valuation of Agricultural and Business Property

A farming estate valued at £7 million, for example, could now face an inheritance tax bill of around £400,000. While current rules allow that bill to be paid over ten years, interest-free, the ongoing burden should not be underestimated.

“That still means finding around £40,000 a year from a business where cash flow is often tight,” Tom notes. “For a lot of families, that would come as a real shock.”

What makes this particularly difficult is that many farming families have never had to think in these terms before. Assets have passed from one generation to the next without anyone needing to ask uncomfortable questions about value, 

A Farm Is a Business That Can’t Be Broken Up

Succession planning for farms brings challenges that are rarely present in other estates. A farm is not simply a collection of valuable assets; it is a single, interdependent business. Land, buildings, machinery, agreements and people all rely on each other to function effectively 

Total income from farming in the UK in 2024

“These are treasured assets that realistically need to be kept together,” Tom explains. “You can’t carve up a farm and expect it to continue operating in the same way.”

Unlike residential property or financial 

, fragmenting ownership or forcing sales to meet tax liabilities can undermine the commercial viability of the entire enterprise. This makes forward planning not just sensible, but essential.

Before You Plan for Tax, You Have to Understand Ownership

When asked where families should begin, Tom is unequivocal that the starting point is not tax mitigation strategies, but understanding ownership in detail.

“The most useful place to start is getting a really firm grip on who owns what,” he says. “It sounds simple, but over time and over generations, it often becomes very complicated.”

Land and assets may be spread across individuals, farming partnerships, companies or 

, with some family members actively involved in running the business and others entirely removed from day-to-day operations.

“Without that clarity,” Tom explains, “you don’t really know the size of each person’s estate, who might ultimately face a tax bill, or even who would be expected to pay it.”

The Conversations That Decide More Than the Numbers

While technical planning tools are available, Tom believes the greatest 

 lies not in the rules themselves, but in how families respond to them.

“The biggest danger at the moment is thinking this is all going to go away,” he says. “There’s been a lot of lobbying and the outcome is better than it was, but the government does seem determined to implement these changes.” 

Successfully handing the reins to the next generation

Just as important are the human conversations that many families delay because they are uncomfortable or emotionally charged. Decisions about involvement, responsibility and future control often prove harder than addressing the financial implications.

“These conversations go well beyond financial planning,” Tom explains. “They’re about family dynamics, responsibility and long-term stewardship.”

The Window for Action Is Narrower Than Many Realise

Despite the challenges, Tom is clear that families are not without options. Gifting, trusts and life insurance can all play a role in managing inheritance tax exposure, provided they are used thoughtfully and in the right order.

However, many of these strategies depend on time. You must survive 7 years following a gift of over £3,000 for it to be completely free from inheritance tax, and delayed action can sharply limit what is achievable.

“Hearing about this late, and with implementation happening relatively quickly, does still present challenges,” Tom acknowledges. “Which is why starting sooner rather than later is so important.”

APR Still Protects Farms: Just Not by Default

The revised APR regime is unquestionably less punitive than originally proposed, and many smaller farms are likely to remain unaffected. The relief still plays a vital role in protecting working agricultural businesses and supporting long-term stewardship.

What has changed is the need for engagement.

Families can no longer assume APR will simply take care of itself. Understanding ownership, questioning assumptions that may have gone unchallenged for decades, and starting clear, honest conversations are now essential steps in ensuring farms remain viable for the next generation, not just from a tax perspective, but as functioning businesses with a future.

 — While recent changes mean up to £2.5 million per individual (or £5 million per couple) of qualifying agricultural and business assets can still pass free of inheritance tax, relief above this level is now capped, creating a potential 20% tax charge on excess value.

 — Understanding exactly who owns each asset, and how those assets are structured across individuals, partnerships, companies or trusts, is the starting point for any effective APR strategy.

Succession planning must protect the working farm

 — Farms are integrated businesses, not collections of standalone assets. Poorly coordinated planning or unanticipated tax liabilities can disrupt commercial continuity and undermine long-term viability.

Existing wills and trusts may no longer be fit for purpose

 — Many documents were drafted under the assumption of full APR. Reviewing and updating them is essential to ensure estates are structured efficiently under the new rules.

Early, specialist advice reduces costly mistakes

 — With limited liquidity, tighter timeframes and greater complexity, expert guidance helps families manage inheritance tax exposure while safeguarding the farm’s multi-generational future.

Agricultural Property Relief: What Changing Rules Mean for Farming Families

Tom is a Chartered Financial Analyst and portfolio manager at W1M. He works closely with UK and international families to help structure and manage their wealth in a way that reflects their goals and circumstances. His approach is collaborative and practical, aiming to simplify complex decisions and provide clarity around long-term planning.

Tom also draws on a trusted network of professional contacts, including tax advisers and legal specialists, to ensure clients benefit from a joined-up approach across a wide range of financial and related matters.

Portfolio Manager

Tom Lawson

W1M is a leading international wealth and investment management firm. With £24 billion in assets under management (AUM) and a team of c.350 professionals, W1M specialises in working with high-net-worth and ultra-high-net-worth individuals and families, charities, and institutions.

The firm offers an extensive range of services, including cross-border advisory and planning expertise, institutional-quality investment management, and comprehensive global tax and consolidated portfolio reporting, designed to meet the evolving complexities of wealth and investment management, including addressing international and intergenerational needs.

Beyond its direct client relationships, W1M also maintains a longstanding partnership with Independent Financial Advisers, providing access to its market-leading investment solutions.

Headquartered at 16 Babmaes Street, London, W1M also operates offices in Barcelona, Barbados, Edinburgh, and Glasgow. The firm is regulated by the Financial Conduct Authority (UK), Securities Exchange Commission (US) and the Comisión Nacional del Mercado de Valores (EU).

They have helped individuals and families grow and preserve wealth for decades. From day one, they have focused on your priorities and aspirations to create a personalised wealth plan and investment strategy that reflects your unique circumstances and values as they evolve. Their offering has been shaped by the needs of their clients, designed to meet the evolving complexities of managing wealth.

A dedicated wealth manager will tailor a wealth plan to your family’s goals and priorities, understanding your short- and long-term objectives, reviewing your finances, risk tolerance, and preferences, and crafting a strategy for UK, US and European assets. This includes lifetime wealth and cash flow modelling, exploring tax efficiency and structuring opportunities, and conducting regular reviews to track progress and make adjustments as needed.

W1M Wealth & Investment Management offers extensive active investment management capabilities built around you and available across markets and asset classes.

Their approach focuses on your wealth in its entirety, integrating wealth planning, investment management and consolidated reporting, to ensure that the wealth management solution aligns seamlessly with your individual objectives and aspirations.

Dedicated portfolio managers will establish a personalised long-term investment strategy to implement your wealth plan. They firmly believe in a global, active and direct approach to investing across equities, fixed income and alternative asset classes. Your investments will be structured for tax efficiency and aligned with your individual preferences. You will have access to investment expertise, insights and events throughout the year.

The value of investments and the income derived from them may rise as well as fall, and investors may not get back the amount originally invested. Capital security is not guaranteed. W1M and its affiliates do not provide legal or tax advice.

W1M Wealth & Investment Management

Luke joined W1M company in February 2017. Luke is Co-head of Multi-Asset Strategies at the firm and is lead manager of the Waverton Real Assets Fund and Waverton Absolute Return Fund. He is a key team member responsible for managing a range of multi-asset strategies at the firm, including the award winning MPS. He has built and developed the collective investment selection process and our continues to focus on the selection of alternative investments for the firm. Luke has also worked at New Star Asset Management and SG Private Bank. He has a BA Hons degree from Manchester University and is a CFA charterholder.

Co-head of Multi-Asset Strategies

Nick joined W1M from the 1762 division of RBC Brewin Dolphin, where he had been since May 2018. There, he played an instrumental role in establishing its private wealth proposition, which provided access to a wide range of wealth management solutions. Serving as the firm’s Operations Director, he was responsible for managing the UHNW advice-led service, before moving to become Chief of Staff. Prior to 1762, Hammond worked at Baird & Co as its Chief Operating Officer and at C Hoare & Co as Head of Portfolio Management.

Head of Private Wealth and US Private Wealth

Helen brings over 20 years experience working with HNW and UHNW clients and families. Prior to joining W1M, Helen was a Senior Wealth Manager at Coutts where she worked within the International Client Group specialising in looking after the wealth planning needs of European and US clients, providing bespoke financial solutions on and offshore.

Helen is a chartered member of the Chartered institute for Securities and Investment (CISI) having previously been awarded both the Private Client Investment Advice and Management (PCIAM) and the Investment Advice Diploma (IAD).

Outside work Helen enjoys travelling with her family, playing golf, tennis, and skiing, and watching her son in his various sporting endeavours.

Wealth Manager

Cuthbert is a Director and Portfolio Manager. He looks after a wide range of clients, predominantly those resident in the UK as well as some based overseas. Many of these are multi-generational families and have been clients for many years. Cuthbert is experienced in managing portfolios in different structures including personal portfolios, pensions, trusts and corporates (particularly family investment companies). In addition, Cuthbert works closely with clients' financial advisors, lawyers, accountants and/or the company financial planning team to structure the investments in the most tax efficient manner.

Cuthbert is a Chartered Financial Analyst (CFA) Charterholder, a member of the Chartered Institute for Securities and Investment and has a degree in History from Edinburgh University. He joined the company in 2017, having previously worked at JM Finn & Co.

Kim is an Executive Director in the US Wealth team and advises international and US-connected families & individuals on their global wealth management requirements.

Prior to joining W1M, Kim was a wealth manager at Coutts where he worked with HNW & UHNW international & US families for 8 years. He previously spent time working in the wealth management industry for a global bank in Switzerland where he is a dual citizen.

Kim graduated from the University of Exeter in Economics & Politics and was awarded the Private Client Investment Advice & Management (PCIAM), and the Investment Advice Diploma (IAD), by the Chartered Institute for Securities & Investment (CISI) where he is a chartered member.

As a keen traveller Kim has an interest in experiencing new cultures in different countries. He enjoys playing tennis regularly, is an avid skier, and struggles to improve his golf.

Josh is an Executive Director within the US Wealth team, advising US-connected families and individuals in the co-ordination and management of their wealth across multiple jurisdictions.

He has extensive experience in structuring global assets to ensure his clients are maximising their affairs. This includes setting up strategies prior to arriving and whilst residing in the UK; helping clients to visualise and manage their cashflow effectively and forming US/UK compliant estate plans.

Josh was shortlisted in the Spears Wealth Management Awards as a “Future Leader in Private Client Services.”

Having a broad network of professional contacts allows Josh to provide a joined-up approach across a wide range of matters.

Josh has been awarded a Chartered Fellow Membership of the Chartered Institute for Securities & Investments having achieved the Private Client Investment Advice and Management (PCIAM) qualification, Investment Management Certificate (IMC) and the Diploma in Regulated Financial Planning.

Jamie joined W1M in 2017 and is a team head within the Private Client business, heading up a team of 5 portfolio managers overseeing £1.65bn of assets under management.

Jamie looks after direct client relationships taking responsibility for portfolio construction through to reporting. Managing a wide range of investment portfolios across the private client, US linked individuals, Trustee, and Professional Adviser space. Jamie particularly enjoys building relationships across multi-generational family portfolios.

Jamie started his career at Quilter Cheviot where he specialised in Ethical and Sustainable investments. Jamie has various investment qualifications and is a Chartered Fellow of the CISI and has a degree in Economics from Newcastle University.

Todd is an Executive Director with the US Wealth team where he specialises in providing international wealth planning, tax efficient investment structuring and consolidated wealth reporting for cross border Americans, and non-US citizens inside and outside the US.

In addition to his business in the US and UK, more recently, Todd has partnered with W1M Europe’s office to assist the division’s geographic expansion; with a focus on US connected clients across key European locations including Spain and Portugal.

Prior to joining W1M, Todd was an international wealth manager in London where he managed and advised cross-border American clients.

Prior to moving to London in 2018, Todd spent 19 years in US private banking with UBS and Citibank in New York City, including 10 years as Director – Head of Sales for the UBS Headquarters office in Manhattan.

In the UK, he holds the Private Client Advice and Management certificate and is a Chartered MCSI with the CISI – Chartered Institute for Securities & Investment.

Todd holds the Certified Financial Planner™, Certified Investment Management Analyst®, Certified Private Wealth Advisor® professional designations in the US.
US regulated licenses: Series 3, Series 7, Series 9, Series 10, Series 63, Series 65.
US Insurance licensed for: Life, Accident & Health, and Long-Term Care.

Tom Lawson

Bio

Articles from author

Agricultural Property Relief: What Changing Rules Mean for Farming Families

Start your journey to your
Financial well-being

FIND OUT MORE

LEGAL

CONTACT US

Tom Lawson

Bio

Articles from author

Agricultural Property Relief: What Changing Rules Mean for Farming Families

Start your journey to your Financial well-being

FIND OUT MORE

LEGAL

CONTACT US

Start your journey to your
Financial well-being