After farmers gathered in London this week to protest against the government's inheritance tax plans in this year’s Autumn budget, wealth managers discuss the impact.

Following UK Chancellor of the Exchequer Rachel Reeves' Autumn Budget in October, which included a series of tax hikes expected to raise taxes by £40 billion ($52 billion), wealth managers assess the impact of the inheritance tax increases on agricultural businesses.

Inheritance tax, which is charged at 40 per cent above a threshold of £325,000 ($422, 000), will stay frozen until 2030, according to Reeves, but agricultural and business property business relief will be reformed with assets over £1 million facing a 20 per cent rate. A 50 per cent relief will be applied in all circumstances on inheritance tax for shares on the Alternative Investment Market (AIM). The change will take effect from April 2026, and it is expected that it will force more land onto the market in order to meet IHT bills.

“It is clear to see why such sudden and sharp changes to Agricultural Property Relief and Business Property Relief have angered the UK’s farming communities – many of whom feel that they will be unable to hold onto land that has been in their family for generations,” Ingrid McCleave, partner at UK law firm DMH Stallard, said in a note.

“Where historically Agricultural Property Relief relieved 100 per cent of an individual's agricultural land from IHT, under new reforms the value of farming assets qualifying for relief will be aggregated and capped at £1 million per farmer. Anything above this cap will be taxed at 20 per cent,” McCleave added.

“This will likely pose a number of complex issues for farmers to navigate. Should they be unable to pay the IHT, farming families will likely be forced to sell parts of the farm and may therefore have to go into partnership with their children to mitigate tax exposure and keep a hold on their farms – many of which have been passed through the family for generations,” she continued.

“This will have a huge impact on family businesses and farms, especially farms in more affluent areas of the UK. Individuals who may not have had to consider estate planning in detail will now need to plan well in advance to avoid having to dispose of assets on death,” Anna Warren, tax director at Bentley Reid, said.

"Long term planning for a sector is crucial to the nation’s economy as agriculture requires certainty, and farmers are justifiably angry about having the rug pulled out from beneath them,” Matthew Yates, partner and joint head of the private client team at Hunters, a firm specialising in lifetime and post-death tax and succession planning for UK individuals, said. 

“The government’s approach does not seem to be based on accurate figures, and doesn’t appear to be adequately thought through given their assertion that a relatively small number of farms will be affected. That is not our experience of the value of land in the agricultural sector. This is another reason for hardworking farmers to wonder why they should carry on," he added.

Hunters, which is based in Lincoln's Inn, operating at the heart of legal London, provides a range of services to individuals, businesses, trusts, landed estates and charities who expect a high level of personal service and expertise. 

Both the Country Landowners Association (CLA) and National Farmers Union (NFU) have also launched petitions to allow those who disagree with the changes to share their opinion with Reeves. NFU president Tom Bradshaw described it as a disastrous budget for family farmers, especially tenant farmers.

Reeves said that three-quarters of farms would be unaffected by the reduction in IHT reliefs, but the CLA said it would impact 70,000 farms. "Farmers I know that you have been shafted. But please don't despair. Just look after yourselves for five short years and this show will be gone," Jeremy Clarkson, farmer, journalist and TV presenter, said.