The legal action is not against the specific changes to inheritance tax but, instead, to the alleged move by the UK government to hold only a narrow, technical consultation on the change, and not a broader one.

The UK Treasury is tight-lipped on law firm Collyer Bristow's move to act against it for imposing inheritance tax on farms and family-run businesses without full prior consultation.

The firm is acting for a group of business owners and farmers, and taking instructions from its professional client, Alvarez & Marsal Tax LLP, according to a statement last week.

In October last year, UK Chancellor of the Exchequer Rachel Reeves imposed IHT on agricultural and forms of business property above a certain threshold. The measure has been criticised for potentially causing the break-up of family-run farms and firms. The lawsuit also comes at a time when Reeves’ move to end the UK’s resident non-domicile system has been blamed for encouraging thousands of HNW people to leave the UK.

Reeves is changing the way Agricultural Property Relief and Business Property Relief is calculated.

“We do not comment on potential litigation matters," a spokesperson for the Treasury said in an email to WealthBriefing.

The APR/BPR changes, which are expected to come into force in April 2026, seek to levy IHT on farms and other trading business assets worth more than £1 million on an owner’s death. Because of the availability of 100 per cent APR/BPR, IHT has not been charged on qualifying farms and businesses for the last 33 years.

Collyer Bristow said the judicial review claim only concerns what the claimants say was the government’s failure to comply with its consultation commitments: it does not seek to challenge the substance of the APR/BPR changes themselves – though they hope a lawful consultation exercise could still inform the government’s plans. 

According to the claimants, Reeves’ decision to launch only a technical consultation on one narrow aspect of the APR/BPR changes (relating to certain trusts) instead of conducting a wider consultation exercise – including seeking contributions from affected taxpayers on the principles and practicalities of the government’s new policy objectives – failed to comply with her public law duties.

When the Chancellor launched her limited APR/BPR consultation on 27 February 2025, the government’s policy on tax consultations was set out in the “Tax Consultation Framework” of March 2011.

In that policy document, the government committed itself to conducting consultation exercises on both the principles and the technical details of tax measures in advance of any major policy changes, a statement from the law firm said.  

It is understood that the government argues that its reforms to Agricultural and Business Property Relief are necessary to fix public services; three quarters of estates will continue to pay no inheritance tax at all, while the remaining quarter will pay half the inheritance tax that most people pay, and payments can be spread over 10 years, interest free.