We live in a rural area. Yes, the Leeds-Bradford conurbation contains nearly 2 million people, but look out of your window and the rolling hills of Baildon, Bingley, Bradley and Burnsall are in touching distance. So, the changing APR and inheritance tax rules on farmers is a concerning one.

But how significant are these changes?

Radio 4’s More or Less, accompanied by a new research paper by Dr Arun Advani of the University of Warwick tries to put some numbers to this question. And if you’re unsure about what these new tax rules mean, a news story on the government website, www.gov.uk, explains all.

Advani’s analysis suggests that nearly 1,500 farming estates go through the inheritance process each year. And out of those, 480 farms will now have to pay more tax, due to the new tax changes. Out of those, the research suggests that 70 estates will find this problematic: they won’t have non-farm assets to sell to pay the tax, and will therefore have to sell farm assets or borrow or find some other solution.

So, 30% of farm estates will now pay inheritance tax, and 5% will find this problematic.

More or Less also looked at the ‘behavioural response’. Whenever there is a change to tax, people seek alternative ways to manage their affairs to mitigate, reduce or (legally) remove the requirement to pay the tax.

In a previous blog, we discussed the potential of gifting, and it appears that the government believe that many farmers will go down this path. In government projections of income, published by the Office of Budget Responsibility, they factor in this behavioural response in a significant way, a few years after these changes become law.

We do not know whether the government will fully implement this legalisation, will make amendments to it, will delay it or even abandon it. But we know, that for a lot of farmers, the changes in APR and inheritance tax is preying on their minds. It is an issue that accountants and solicitors are also grappling with.

If you want to know your legal options, particularly in the area of gifting and inheritance, please contact Jenny Barron on 01756 692866 or email jenny.barron@awbclaw.co.uk.

27 October 2025

Read more…

Amongst uncertainty about APR changes, is gifting the answer?

Giving away assets before you die. How does it work with IHT?

Inheritance Tax Planning – 7 key strategies to mitigate tax