UK Farming
February 18, 2026

Inheritance tax changes – More than just farms

Recent changes to inheritance tax (IHT) have made headlines, particularly around farming.

But these updates don’t just affect farms. Many family-owned trading businesses could also feel the impact.

Now is the time to review your estate. Planning ahead can help protect your assets and ensure you claim any available relief.

New thresholds for relief

The Government has revised its plans to apply inheritance tax to farms valued above £1 million.

From April, when the new rules come into effect, the threshold for Agricultural and Business Property Relief will increase to:

  • £2.5 million for individuals
  • £5 million for married couples

Qualifying assets above these thresholds will still benefit from relief — but at a reduced rate of 50%.

For clarity, an “estate” for IHT purposes includes all assets owned at death. This means property, savings, investments, and qualifying business interests.

Who else is affected?

Although the spotlight has been on farms, these changes also apply to many family-owned trading businesses.

If you run a shop, garage, manufacturing firm, or another trading enterprise, this matters to you.

It’s important to consider both:

  • The long-term future of your business
  • Your family’s financial security

There may still be steps you can take now to reduce your potential tax exposure.

A sudden and unexpectedly large IHT bill — especially where cash or liquid assets are limited — could put even a successful business at risk. In some cases, it could threaten the jobs and livelihoods that business supports.

This is why reviewing your estate planning is so important. Ensuring you are structured correctly — and claiming all available reliefs — can make a significant difference.

The Government’s perspective

The Government maintains that the updated thresholds strike a balance.

Larger estates will still contribute, while the changes are designed to protect the core of Britain’s rural and small business communities.

Rules around sharing allowances between spouses have also been clarified. This now includes individuals who were widowed or lost a civil partner before the policy was introduced.

Environment Secretary Emma Reynolds said:

“Farmers are at the heart of our food security and environmental stewardship, and I am determined to work with them to secure a profitable future for British farming.”

“It’s only right that larger estates contribute more, while we back the farms and trading businesses that are the backbone of Britain’s rural communities.”

What is the projected impact?

Government projections suggest that around 1,100 estates will be liable for tax under the revised rules from April 2026.

This compares with the 2,000 estates originally expected to be affected.

In this context, an estate refers to a person’s total assets for IHT purposes.

Why estate planning matters — for everyone

These changes highlight a wider point.

Inheritance tax remains one of the UK’s more complex wealth taxes. Even relatively small adjustments in asset values, ownership structures, or business arrangements can have significant consequences.

Whether you own:

  • A farm
  • A family trading business
  • Commercial property
  • Or other qualifying assets

It’s essential to ensure your estate is prepared for any potential IHT liability.

Planning early gives you more options. Waiting can limit them.

Need help?

If you’re unsure how these changes might affect you — or would like to review your estate planning — we’re here to help.

📞 0203 633 0579
📧 enquiries@aetas-partners.com

A conversation today could protect your business and your family’s future tomorrow.

Sources

https://www.gov.uk/government/news/inheritance-tax-reliefs-threshold-to-rise-to-25m-for-farmers-and-businesses

https://www.gov.uk/business-relief-inheritance-tax/what-qualifies-for-business-reliefhttps://moneyweek.com/personal-finance/inheritance-tax/business-owners-consider-before-inheritance-tax-change

https://commonslibrary.parliament.uk/research-briefings/cbp-10181/

https://moneyweek.com/personal-finance/inheritance-tax/inheritance-tax-farmers-climbdown-agricultural-property-relief-threshold-raised