Calculations by the Central Association of Agricultural Valuers (CAAV) starkly illustrate the extent of the impact of the removal of 100% agricultural property relief which gave famers exemption from inheritance tax (IHT) with an estimated 19% more farms exposed to the charge, significantly higher than Treasury calculations.

Under the new regime from April 2026, farmers will only be eligible for a £1m IHT exemption threshold although they will pay a reduced 20% rate of IHT.

The CAAV warned that the Treasury has underestimated the number of farmers who will be immediately affected by a factor of five, mainly by overlooking the number of claims only made under business property relief (BPR) and the true value of those claims, while an extra 19% on top of that will be caught by the charges as inflation erodes the reliefs.