Amid mounting political pressure and nationwide protests, a quiet but crucial issue is rising to the surface for family farms: succession.
While debates over agricultural tax reform make headlines, the deeper, more enduring challenge lies in ensuring the smooth and secure transfer of farms to the next generation. With the government looking increasingly unlikely to reverse these unpopular policies, how can the agricultural community ensure that their legacy continues?
From 6 April 2026, reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR) will cap the amount of farm assets exempt from inheritance tax (IHT) at £1 million.
The government estimates around 28% of farms will be affected, approximately 58,500, but this figure has been challenged by sector bodies, with the National Farmers’ Union and the Country Land and Business Association warning that the true figure could be significantly higher, affecting up to 66% of farms.
One thing I’m sure they would agree on, however, is that these changes signal a clear shift in policy. For many farming families, they could also act as a tipping point: Succession planning is now an operational imperative.
According to the Department for Environment, Food & Rural Affairs, the average farm in England is now worth £2.2 million. A single farm owner can currently pass on up to £1.5 million tax-free, comprising a £1 million 100% APR relief, plus £325,000 Nil-Rate Band and up to £175,000 Residence Nil-Rate Band (a taper reduces this amount by £1 for every £2 that the net value of the estate is more than two million). For the average farm, this still leaves £800,000 exposed to tax (as the Residence Nil-Rate Band is reduced by £100,000), which is a potential bill of £160,000, with the option to pay over 10 years.
For jointly owned farms, the threshold doubles to £3 million (with properly structured wills), offering more protection. However, the wide-ranging nature of land values, business diversification, and shared ownership structures means that many farming estates still face exposure. Worse still, where no succession planning is in place, the risks are not just financial; they are existential.
There are three big challenges:
Succession is not a single event; it’s a phased transition of ownership, knowledge, and leadership. Seeing it in this manner is a crucial distinction.
A proactive succession plan outlines not just who will inherit, but who will operate, who will own, and how that evolution will be funded and structured.
Delaying key decisions increases the likelihood of disputes, inefficiencies, or tax liabilities. Opening honest discussions between generations, even if they’re difficult, can help to align expectations and secure the farm’s future.
Tax mitigation is just one part of succession. The legal and financial structure of a farming business plays a central role in its long-term viability. From partnerships and limited companies to discretionary trusts, each setup has vital implications for control, liability, and IHT exposure.
Given the upcoming APR and BPR caps, revisiting your farm’s ownership structure could help optimise the available reliefs. Gradual asset transfers, gifting strategies, and clearly documented governance arrangements all contribute to a more tax-efficient and manageable transition.
Even where intentions are clear, the absence of formal documentation can lead to costly misunderstandings. Succession plans should include:
Critically, these documents must be kept up to date, particularly following land sales, diversification, or family changes. A review every 3–5 years, or whenever there’s a major life or business event, is a good rule of thumb.
It’s important to clarify that a successful transition doesn’t just pass down assets; it transfers leadership skills. Like with any business, investing in the skills and development of the next generation is essential. Today’s farming business leaders need specific expertise not just that of crop rotation or livestock care, but in data analysis, environmental compliance, subsidy frameworks, and financial management.
Support for next-gen farmers is growing, but it should be led by those who intend to pass the torch. Look out for government schemes such as the New Entrant Support Scheme, land-matching programmes, and industry mentorships, which play a role in helping successors build experience and credibility.
Succession planning is about preserving a way of life, not merely reducing a tax bill. With just under a year to go before APR and BPR changes take effect, time is short, yes, but the opportunity to act is still very much open.
A well-structured, well-communicated succession plan builds resilience. It supports continuity, preserves relationships, and helps secure financial outcomes; not just for the current generation, but for those to come.
At Duncan & Toplis, we work with farm businesses across the country to put in place tailored plans that reflect each family’s needs and values. If you haven’t reviewed your succession strategy recently, or if you don’t yet have one, now is the time to start the conversation.
