Farming’s future featured again in the Budget this year with the announcement that the £1million agricultural property and business property relief will now be transferrable between spouses and civil partners.
The £1million allowance for the 100% rate of Agriculture Property Relief (APR) and Business Property Relief (BPR) will now be fully transferable, meaning that farmers will be able to pass on that relief to their surviving spouse at the time of their death, allowing them to have a greater control on when these assets pass to the next generation.
It has been confirmed this will be back dated (so the spouse could have died before April 2026) and that the spouse did not have to pass £1 million of farming assets to their spouse to be able to claim the £2 million on second death.
This follows the controversial changes made by the Chancellor in the 2024 Autumn Budget that has drastically altered how farmland and family-run businesses are passed down to future generations - making forward thinking on succession planning more important than ever.
Sam Doherty, Partner in Thrings’ Private Client team, said: “While the wider APR and BPR changes continue to be terrible news for farmers and their families, this amendment to the policy is a positive step in helping farmers to pass on their estates to the next generation.
“The prospect of relief not being able to transfer to the surviving spouse or civil partner was leaving farmers facing the difficult decision to give away a million on first death to someone other than their spouse or lose the relief completely. This was presenting farmers, especially ones with young families where no obvious successor had been identified, with an almost impossible situation - so for want of a better word, this will be a relief.
“The challenge still remains that many farms in this country will be valued in excess of £2million so the changes will still make an impact, and it is important that farmers and landowners seek legal advice as soon as possible to ensure their succession planning is as efficient as possible.”
Thrings’ Private Client and Private Wealth Disputes lawyers are experts in supporting individuals and families with a range of personal matters that are important to you, ensuring you and your estate are prepared for the future. Whether it relates to succession planning, wills, contentious probate, or you are facing conflict over an inheritance or have concerns over someone’s capacity, they will be there for you. To find out more, please get in contact.
