UK Farmers Face Inheritance Tax Challenges at Annual Conference

As farmers from across the UK gather for the 2025 Washington Farmers Market Conference, they find themselves grappling with significant changes to inheritance tax rules, which could have substantial implications for their businesses and families. The conference, held from February 21-22 at the Kitsap Conference Center in Bremerton, WA, aims to provide attendees with the tools and knowledge to navigate these challenges and build their operational toolkits, organizational skills, and technical know-how.

The new inheritance tax rules, announced in the recent Autumn Budget by Chancellor Rachel Reeves, have sparked protests from farmers across the country. The changes restrict the availability of Agricultural Property Relief (APR) and Business Property Relief (BPR), which previously enabled most farms to fall out of the inheritance tax net. Under the new rules, the reliefs will be capped at £1 million each, with assets above this threshold subject to a 20% inheritance tax rate.

For farmers with high-value assets or diversified businesses, these changes could lead to substantial tax liabilities. For example, a single farm owner with a £2.2 million farm (the average net worth of a farm in England) would see £700,000 of their assets subject to the new 20% tax rate, resulting in a £140,000 tax bill payable in interest-free instalments over ten years (FactCheck, 2025).

Married couples with the same £2.2 million farm would not face any inheritance tax, as their combined £3 million tax-free allowance would cover the full value. However, farmers with lower-profit margins or those relying on tenanted land may struggle to meet these tax liabilities, potentially leading to the sale of land or other assets to pay the tax.

The changes to inheritance tax rules have raised concerns about the potential impact on land ownership, tenancy agreements, and business continuity within the agricultural sector. Farmers with tenanted land may face the risk of tenancies not being renewed or introducing a new, potentially unknown, landlord if landowners are forced to sell farmland to pay inheritance tax. This could disrupt business continuity for tenant farmers, who rely on secure tenancy agreements to maintain their operations and invest in their businesses.

To mitigate the effects of these inheritance tax reforms, farmers attending the conference may consider various strategies, such as lifetime giving, partnership agreements, or careful will planning. However, these options must be weighed against the income needs of the farming family and potential tax consequences.

In conclusion, the new inheritance tax rules present significant challenges for UK farmers, particularly those with high-value assets or diversified businesses. As farmers gather for the 2025 Washington Farmers Market Conference, they will need to consider the potential impacts on their businesses, tenancy agreements, and succession planning. By exploring alternative investment options and adapting their financial strategies, farmers can better prepare for the inheritance tax reforms and ensure the long-term success of their operations.