Wills for Farmers and Landowners, Protecting the Farm Through the Inheritance Tax Changes
A farm is often the most valuable thing a family owns, and the hardest to divide fairly. With the rules on agricultural inheritance tax relief changing from April 2026, it's a good moment to check that your Will still does what you think it does.
What has changed for farm inheritance tax?
Quick summary: Agricultural Relief can remove inheritance tax on qualifying farmland, farm buildings and farmhouses. For deaths on or after 6 April 2026, 100% relief applies to the first £2.5 million of combined agricultural and business property, with 50% relief on anything above that, an effective rate of up to 20% on the excess. Unused allowance can pass between spouses and civil partners, so a couple may be able to shelter up to £5 million between them.
The figure was originally proposed at £1 million and was raised to £2.5 million before the rules took effect, so older articles you may have read quote a much lower limit. For many family farms, the new threshold removes the immediate pressure, but it doesn't remove the need for a Will that fits how your farm is actually owned and who you want to carry it on.
What qualifies, and what doesn't
Agricultural Relief only applies to genuine agricultural property on a working farm in the UK. In broad terms:
- Qualifies: land or pasture used to grow crops or rear animals, farm buildings and cottages, and farmhouses.
- Farmhouses are limited. The house must be appropriate in nature and size for the farm, and only its agricultural value is relieved. Any extra value it has as a country residence isn't.
- Doesn't qualify: machinery, livestock and harvested crops aren't covered by Agricultural Relief, although Business Relief may apply to some of them if you run a farming business.
- Ownership and use. The land generally needs to have been owned and used for agriculture for two years if you farm it yourself, or seven years if it's let to someone else.
- Older tenancies. Land let on a tenancy that began before 1 September 1995 may only attract 50% relief rather than 100%.
Where your Will makes the difference
- Leaving everything to your spouse. This keeps tax at nil on the first death, and unused allowance can transfer. But the whole farm then sits in your spouse's estate, exposed to remarriage, care costs or a later change of Will. A discretionary trust in your Will can hold the farm for the next generation while still providing for your spouse.
- Fairness between children. If one child farms and others don't, your Will can say who takes the farm and how the rest are provided for, through life insurance, other assets, or a share held in trust. Without a Will, the intestacy rules split everything between your children, which can force a sale.
- Claims from those left out. A child who doesn't inherit land can still be eligible to claim against the estate. We cover how that works, and how to reduce the risk, on our page about excluding someone from your Will.
- Passing the farm on during your lifetime. This can work, but gifts made within seven years of death count towards the £2.5 million allowance, and you may lose control of the business. It's worth advice before you act.
- Selling or winding down. Relief depends on the position at death. If you sell up and hold the proceeds as cash, there is no agricultural property left to claim relief on.
Farm valuations, qualifying conditions and tax calculations are specialist matters, so this is general guidance rather than personal advice. Wider planning is covered on our Inheritance Tax planning page, and your accountant will usually need to be involved alongside your Will.
Does your Will still fit your farm?
We can review your existing Wills with you, talk through trust options for the farm, and help you work out what to take to your accountant or tax adviser.
Keep the farm in the family, with a Will that is built for it
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