Investment - Articles - Farmers get pre Christmas IHT reprieve

Commenting, Adam Brewer, Senior Investment Director at Rathbones (Exeter office), says: “Generally, this further dilution of the original punch will likely be welcomed by farmers. However, let’s not forget they are still contending with the usual pressures of hefty capital costs and wafer-thin profit margins. Even the eventual £5m allowance may still fall short of preventing family farms from being broken up, and ongoing political uncertainty only adds to the anxiety. While the higher threshold may feel like a pre-Christmas reprieve, many farmers still face a hefty inheritance tax bill. This change doesn’t remove the need for robust planning. Decisions around land use, business structure, and valuations will ultimately determine the longevity of the family farm. Families should review succession plans now - timely advice can make the difference between relief and regret.”

 

Marc Acheson, Global Wealth Specialist at Utmost Wealth Solutions:“The Government’s adjustment belatedly strikes a more pragmatic balance between protecting generational ownership of farms and other business properties with targeting relief where it’s most needed. The £5 million per couple allowance is generous now for farms and business owners in comparison to the looming extension of IHT to pensions on estates in excess of a permanently frozen nil rate band. It will be a welcome Christmas present for many farmers – as well as business owners given this will also apply to Business Property Relief – who have long been fighting the reforms announced at the Autumn 2024 Budget. The question will be now move on to whether the Government seeks to amend any other Inheritance Tax reforms. With the Chancellor set to review the impact of the abolition of the non-dom tax status and publish findings next year, it will be interesting to see the real-life impact of this policy in terms of tax returns and receipts.”

 

Inheritance tax reliefs threshold to rise to £2.5m for farmers and businesses