To date, the government is maintaining its position on these changes and it is essential steps are taken now towards planning for future liabilities. With that in mind we encourage businesses to put aside some time to carry out a methodical review in order to establish where you are now and where you hope to be.
The changes to agricultural property relief and business property relief for inheritance tax announced in last October’s budget are due to apply from April 2026.
1. Establish what you own
Create a list of everything that is owned, and by whom. Think about assets that are in personal ownership, what is held by a farming partnership or trading company, and which assets are leased or rented.
Identify which assets are already transferred to the next generation, and which assets are still owned by the most senior generation.
Are there assets you own but may not farm? For example is there any woodland, are there assets used for sporting purposes and, or, does the farm include areas of amenity land? Also list any interests that are income generating such as telecoms masts on your land, access rights, renewable energy, or buildings/cottages that are let out.
Identify all the machinery owned and if relevant the livestock. Are there any renewables that may add value such as turbines or biomass boilers? Who owns these?
Next it is important to establish your liabilities and assess how much debt the business is carrying as this will be offset against the overall value. Don’t forget to note down any cash, pension pots, stocks/shares or other liquid assets.
2. What is the value?
Where possible put some numbers against what the assets are worth. Use a valuer if needed.
3. What will the business look like in 10 years?
It is important to have open and honest conversations with family members about who is going to take over the farming business and property, and when. What are the expectations and requirements of the next generation? Do views align? Also discuss what you need to keep hold of in terms of property to live in, and how much income you need for retirement.
4. Classify your assets
Which assets are core to the business and which fall into the category of nice to have but not essential? Is there potential to dispose of some assets and initiate an early transfer of property to other family members? Are there assets which carry a large amount of capital gain, that are not trading or don’t qualify for any relief?
5. Take advice
Pay for advice. Professional fees are worth the investment now. Whether it is your lawyer, accountant, financial advisor or agent, a collaborative approach between advisors is required to find a practical solution towards succession and mitigating tax in the future.
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
