Practical Considerations for Inheritance Tax Planning

Changes in Inheritance Tax relief due to be introduced from 6 April 2026, including a restriction in 100% Agricultural Property Relief (APR) and Business Property Relief (BPR) to £1m, will substantially increase the Inheritance Tax due for many farming families.

To implement planning to reduce the tax due requires a full assessment of the value of farmland, who owns the land, and whether there is any tenancy over the land. If the farm is run as a company, then the company shares will need to be valued and the Inheritance Tax exposure on each family member’s estates will need to be assessed.

Ensuring that each family member’s £1m of relief is used is essential to the planning. Where company shares are involved, it may be possible to gift shares and fragment the ownership of the company, which will allow the share values to be discounted. Gifts of shares to a trust may also enable a further £1m of relief to be obtained.

Having fragmented the ownership of the company or partnership, it will be important to consider shareholder and partnership agreements and to review Wills to ensure that these still achieve the right results in conjunction with the gifts and planning.

It is also important to consider payment of any remaining Inheritance Tax particularly where money needs to be extracted from a company with additional Corporation Tax and Income Tax charges, unless a company purchase of own shares is possible.

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For more information or advice on Inheritance Tax Planning, please contact either your usual Whitings contact, or your local Whitings office.