Skip to main content
WUHLD
← Back to articles

Agricultural Property Relief (APR) for Farmers: Complete UK Guide 2025

· 32 min

Note: The following scenario is fictional and used for illustration.

David Thornton, 62, has farmed the same 180-acre Herefordshire farm for 38 years—the same land his father and grandfather worked before him. The property, valued at £2.4 million, includes arable land, livestock pastures, farm buildings, and the family farmhouse. When David heard about the Autumn Budget 2024 changes to Agricultural Property Relief, his first thought was devastating: "Will my children have to sell the farm to pay the tax bill?"

Under the old rules, David's entire farm would have passed to his children tax-free under 100% APR. Under the new rules from April 2026, only the first £1 million receives full relief. The remaining £1.4 million faces an effective 20% tax rate—a £280,000 bill. Even with 10-year interest-free instalments, that's £28,000 annually that a working farm must generate just to pay tax.

David's situation represents approximately 500 farm estates annually that will face higher inheritance tax bills under the reformed APR rules. But with proper planning—combining APR with spousal allowances, lifetime gifts, and strategic will structures—many farming families can still protect their legacy.

This guide explains exactly what Agricultural Property Relief covers, how the April 2026 changes affect your farm, and what you can do to minimize inheritance tax while keeping your land in the family.

Table of Contents

What Is Agricultural Property Relief (APR)?

Agricultural Property Relief is an inheritance tax relief introduced in 1992 to prevent farming families from having to sell land to pay inheritance tax bills. When agricultural property qualifies for APR, it can be passed on at reduced or zero tax rates, protecting family farms and the rural economy from being broken up.

In 2021-22, 1,730 estates claimed APR, with £550 million of inheritance tax relieved—an average tax saving of over £300,000 per estate. Without APR, many working farms would need to be sold or split to pay the standard 40% inheritance tax rate.

APR covers agricultural land and buildings used for growing crops or rearing animals. It applies to family farms, agricultural estates, stud farms, and from April 2025, land managed under environmental agreements with government bodies.

Emma runs a 250-acre dairy farm in Somerset worth £3.2 million. Under APR, she can structure her estate so her children inherit the working farm with reduced tax liability, ensuring 40 years of dairy farming continues into the next generation. Without APR, the £1.28 million inheritance tax bill (40% of £3.2 million) would likely force a sale.

The relief works by reducing the taxable value of qualifying agricultural property. From April 2026, under the reformed rules announced in Autumn Budget 2024, you get 100% relief on the first £1 million of combined agricultural and business property, then 50% relief on amounts above that threshold.

Understanding APR has become more critical following the 2026 reforms. Farmers who previously assumed their entire estate would pass tax-free now need to calculate whether they exceed the £1 million threshold and plan accordingly.

The April 2026 Changes: What's Different Now

On 30 October 2024, the government announced significant reforms to Agricultural Property Relief, effective from 6 April 2026. These changes fundamentally alter how inheritance tax applies to farm estates, particularly affecting larger holdings.

Under the old rules, all qualifying agricultural property received 100% relief from inheritance tax with no limit. A £5 million farm passed to the next generation with zero inheritance tax, provided it met the qualifying criteria.

From 6 April 2026, according to HMRC guidance, the 100% relief is capped at £1 million of combined agricultural and business property. Above this threshold, you receive only 50% relief, meaning you pay inheritance tax at an effective rate of 20% (half the standard 40% rate) on the excess.

Here's how the changes compare:

Aspect Before April 2026 From April 2026
Relief rate 100% on all qualifying property 100% on first £1m, then 50% above
Effective tax rate 0% 0% on first £1m, 20% above
Cap None £1m combined APR + BPR
Payment terms N/A 10-year interest-free instalments
Lifetime gifts 100% relief if within 7 years Subject to new cap if donor dies after 6 April 2026

The government can spread the tax payment over 10 years interest-free, which reduces the immediate cash burden but doesn't eliminate the total tax owed.

James owns a £2.5 million arable farm in Lincolnshire. Under old rules: £0 tax. Under new rules (assuming single owner with no spouse): £1 million gets 100% relief (£0 tax), the remaining £1.5 million gets 50% relief, meaning £750,000 remains taxable at 40% = £300,000 total tax bill. With 10-year instalments, that's £30,000 annually—but with spousal allowances (explained in Section 5), this reduces significantly if he's married.

The reforms affect approximately 500 farm estates annually (around 29% of APR claimants), while three-quarters of estates claiming APR remain unaffected because they fall below the £1 million threshold.

Critically, the new rules apply to lifetime gifts made on or after 30 October 2024 if the donor dies on or after 6 April 2026 within 7 years of making the gift. This means farmers who gifted their farms immediately after the Budget announcement are subject to the £1 million cap if they die after 6 April 2026 within the 7-year window.

What Property Qualifies for Agricultural Relief

Agricultural Property Relief covers specific types of property used for agricultural purposes. The HMRC definition, according to official guidance, focuses on working agricultural land and buildings, not hobby farms or investment property.

Qualifying property includes:

Farmland: Land or pasture used to grow crops or rear animals commercially. This covers arable land, pasture, meadows, orchards, and market gardens.

Farm buildings: Structures used for agricultural operations including barns, livestock housing, grain stores, milking parlours, silage clamps, and machinery storage directly supporting farming activity.

Worker cottages: Cottages occupied by farm workers, provided they're character-appropriate to the farm and necessary for the agricultural business.

Farmhouses: The main farmhouse qualifies if it's character-appropriate to the size and nature of the farm. A 10-bedroom manor house on a 50-acre smallholding might not fully qualify, whereas a 4-bedroom farmhouse on 200 acres typically would.

Woodland: Commercial forestry qualifies only if trees are planted and harvested at least every 10 years. Ancient woodland managed purely for conservation doesn't qualify under standard APR rules.

Stud farms: Land and buildings used for breeding and rearing horses for commercial purposes qualify as agricultural property.

Environmental land: From 6 April 2025, according to government policy, APR extends to land managed under environmental agreements with Natural England, Forestry Commission, and approved responsible bodies. This recognizes environmental stewardship as legitimate agricultural use.

The property must be part of a working farm demonstrating commercial intent. It doesn't need to be profitable, but it must be genuinely operated as an agricultural trade or business, not a lifestyle choice or passive investment.

Sarah's 120-acre Shropshire farm grows wheat and barley (qualifies), includes a grain storage barn (qualifies), and has a 4-bedroom farmhouse (qualifies if character-appropriate to the 120-acre holding). All three elements would typically receive full APR treatment.

Tom's Devon farm includes 80 acres of pasture for sheep (qualifies), a lambing shed (qualifies), and a cottage occupied by his farm manager (qualifies as worker accommodation necessary for the agricultural business).

Rachel's estate includes 15 acres of ancient woodland managed for biodiversity under a Countryside Stewardship agreement. From April 2025, this newly qualifies for APR under the environmental land management extension, even though no timber is harvested.

The "character-appropriate" farmhouse test considers the size of the farm, the type of farming, the number of workers needed, and whether the house is proportionate to the agricultural operation. HMRC examines this on a case-by-case basis.

Geographic scope changed from 6 April 2024: APR no longer applies to agricultural property in the Channel Islands, Isle of Man, or European Economic Area. Only UK agricultural property now qualifies.

Ownership and Occupation Requirements

Agricultural Property Relief isn't automatic—you must meet specific ownership and occupation requirements. According to HMRC guidance, the rules distinguish between land you farm yourself and land you let to tenant farmers.

Owner-occupied farmland: You must own and occupy the property for agricultural purposes for 2 years immediately before death or transfer. "Occupy" means you farm it yourself, or a company you control farms it, or your spouse or civil partner farms it.

Let farmland: If you let the land to a tenant farmer, you must own it for 7 years immediately before death or transfer, even if you don't personally farm it.

The occupation must be continuous. If you stop farming for a significant period, you may lose APR qualification and need to restart the clock.

Michael has farmed his 140-acre Yorkshire farm for 35 years, far exceeding the 2-year requirement. His son joined the partnership 8 years ago. Both their partnership shares qualify for APR because they've occupied the land for agricultural purposes well beyond the minimum period.

Susan bought 60 acres of Dorset farmland 18 months ago and immediately started arable farming. If she died today, it wouldn't qualify yet because she hasn't reached the 2-year ownership and occupation requirement. Her will should acknowledge this timing gap and plan accordingly.

Robert lets his 200-acre Cumbrian farm to a tenant farmer on a Farm Business Tenancy. Robert has owned the land for 12 years, easily exceeding the 7-year requirement for let land. It qualifies for APR even though Robert doesn't farm it himself—ownership for seven years is sufficient when land is let commercially.

If you inherit farmland that already qualified for APR in your parent's estate, you don't need to restart the occupation period. The qualifying period carries over, so if your parent owned and occupied the farm for 30 years, it immediately qualifies in your hands.

Farming through a company you control counts as occupation. If you own 100% of a farming company that operates the land, the 2-year owner-occupation rule applies, not the 7-year let land rule.

Partnership arrangements also qualify. If you own land in partnership with family members who all actively farm it, each partner's share qualifies under the 2-year rule.

A common trap: retiring and letting your farm to your adult child on a commercial tenancy can reset the clock from 2 years (owner-occupied) to 7 years (let land). If you die within that 7-year period, the relief may not apply. Careful structuring—such as partnership arrangements or lifetime gifts—can avoid this problem.

How Much Farm Property Can You Pass On Tax-Free?

Understanding how much you can pass on without inheritance tax requires combining Agricultural Property Relief with other allowances. Under the reforms taking effect 6 April 2026, the calculation depends on whether you're single or married, and whether you have children or grandchildren.

Single farmer with children: You can pass up to £1.5 million tax-free by combining three allowances:

  • £325,000 nil-rate band (standard inheritance tax allowance)
  • £175,000 residence nil-rate band (when your home passes to children or grandchildren)
  • £1,000,000 APR threshold (100% relief on first £1 million of agricultural and business property)

Farming couple with children: You can pass up to £3 million tax-free by combining both spouses' allowances:

  • £650,000 combined nil-rate bands
  • £350,000 combined residence nil-rate bands
  • £2,000,000 combined APR thresholds (£1 million per person)

Single farmer without children: £1.325 million tax-free (no residence nil-rate band because you need direct descendants to claim it):

  • £325,000 nil-rate band
  • £1,000,000 APR threshold

Here's how this works in practice:

Example 1: Single Farmer, £1.8m Farm, Children Inherit

Allowance Amount Tax Due
Nil-rate band £325,000 £0
Residence nil-rate band £175,000 £0
APR (100% relief) £1,000,000 £0
Subtotal tax-free £1,500,000 £0
Remaining estate £300,000
APR (50% relief) £150,000 relieved
Taxable amount £150,000 £60,000 at 40%
Total tax £60,000
Payment option 10-year instalments £6,000/year

Example 2: Farming Couple, £2.8m Farm, Children Inherit

Allowance Amount Tax Due
Combined nil-rate bands £650,000 £0
Combined residence nil-rate bands £350,000 £0
Combined APR (100% relief) £2,000,000 £0
Total tax-free £3,000,000 £0
Estate value £2,800,000
Total tax £0

The spousal exemption strategy is crucial: when the first spouse dies, their entire farm share passes to the surviving spouse tax-free under unlimited spousal exemption. The surviving spouse then has both spouses' combined allowances (up to £3 million for couples with children) to use when they die.

This is why proper will planning is essential. Your will must structure the spousal transfer correctly. If the farm passes to children on the first death instead of to the surviving spouse, you lose the opportunity to combine allowances.

The £325,000 nil-rate band has been frozen until 2030, as has the £175,000 residence nil-rate band. The £1 million APR threshold will remain fixed until 2029-30, then be indexed to inflation thereafter.

What Doesn't Qualify: Common APR Exclusions

Agricultural Property Relief has precise boundaries. Many assets on farms don't qualify for APR, though they may qualify for Business Property Relief instead. Understanding these distinctions is essential for accurate estate planning.

Farm equipment and machinery don't qualify for APR. Tractors, harvesters, sprayers, and other farm machinery are business assets, not agricultural property. They may qualify for 100% Business Property Relief instead, subject to the combined £1 million threshold.

Livestock doesn't qualify for APR. Cattle, sheep, pigs, and poultry are stock-in-trade (inventory), not agricultural property. Like equipment, livestock may qualify for Business Property Relief.

Harvested crops and stored grain (deadstock) don't qualify for APR. These are business inventory, potentially qualifying for Business Property Relief.

Diversified business assets typically don't qualify for APR. A farm shop, glamping pods, wedding venue, or holiday cottages are commercial businesses beyond traditional agriculture. They might qualify for Business Property Relief depending on how they're structured and operated.

Commercial property lettings don't qualify for APR. Converted barns let as holiday cottages or residential rentals are investment property, not agricultural land. They're unlikely to qualify for Business Property Relief either if they're passive investments rather than trading businesses.

Non-agricultural woodland doesn't qualify unless it's commercial forestry with a harvest cycle of at least every 10 years. Ancient woodland held for conservation or amenity doesn't qualify under standard APR rules (though it may qualify under the new environmental land management provisions from April 2025).

Farmhouses disproportionate to the farm may not fully qualify. According to HMRC guidance, if the farmhouse is excessive relative to the agricultural operation, only a proportionate part qualifies for APR.

Investment farmland owned but not farmed or let for farming doesn't qualify. If you own agricultural land but leave it idle without active farming, it fails the occupation requirement.

A critical point: APR and Business Property Relief share the same £1 million threshold for 100% relief from April 2026. A farm with £800,000 land (APR) and £400,000 equipment (BPR) uses £1.2 million of the combined cap—only the first £1 million gets 100% relief, with £200,000 receiving 50% relief.

Hannah's 180-acre Norfolk farm includes £2.1 million farmland (qualifies for APR), £280,000 livestock (may qualify for BPR), and £220,000 tractors and equipment (may qualify for BPR). Combined total: £2.6 million. The first £1 million gets 100% relief, the remaining £1.6 million gets 50% relief, leaving £800,000 taxable at 40% = £320,000 inheritance tax (before other allowances).

Peter's farm includes a converted barn let as a holiday cottage generating £18,000 annually. This diversified income doesn't qualify for APR. Whether it qualifies for Business Property Relief depends on whether it's operated as a trading business (with significant services provided) or a passive investment.

Many farmers assume their entire "farming estate" qualifies for APR. In reality, only the land and certain buildings qualify for APR. Equipment and livestock need Business Property Relief, and the reliefs share the £1 million cap—a detail that significantly affects tax calculations for larger estates.

Combining APR with Business Property Relief (BPR)

Most farm estates include both agricultural property and business assets, making it essential to understand how Agricultural Property Relief and Business Property Relief work together.

According to HMRC guidance on business relief, Business Property Relief covers business assets that aren't eligible for APR. On farms, this typically includes:

  • Farm equipment and machinery (tractors, harvesters, sprayers)
  • Livestock (cattle, sheep, pigs, poultry)
  • Farm deadstock (harvested crops, stored grain, feed)
  • Business assets from diversified income (farm shop stock, machinery for processing)

Business Property Relief at 100% applies to trading businesses and partnership interests. You must have owned the qualifying business assets for at least 2 years (matching the owner-occupied APR requirement).

The crucial point: APR and BPR share a combined £1 million threshold for 100% relief from 6 April 2026. They're not separate £1 million allowances—it's £1 million combined across both reliefs.

If your farm estate includes £900,000 of APR-qualifying land and £300,000 of BPR-qualifying equipment, you've used £1.2 million of relief. The first £1 million gets 100% relief (divided between APR and BPR), but the remaining £200,000 only gets 50% relief, leaving £100,000 taxable.

Claire's farm estate breaks down like this:

  • £1.4 million farmland (APR)
  • £180,000 livestock (BPR)
  • £120,000 tractors and equipment (BPR)
  • £80,000 farm shop stock and fixtures (BPR)
  • Total: £1.78 million

Using combined allowances as a farming couple with children (£3 million tax-free threshold including £650,000 nil-rate bands, £350,000 residence nil-rate bands, and £2 million combined APR/BPR), Claire's entire estate passes tax-free. The £1.78 million is well below the £3 million threshold.

Diversified farm businesses add complexity. A farm shop selling the farm's own produce likely qualifies as a trading business eligible for 100% Business Property Relief. Glamping pods or a wedding venue may qualify if they involve substantial trading activity (providing services, not just passive rental).

Passive land rental companies typically don't qualify for Business Property Relief. If you hold farmland in a company but let it all to unrelated tenant farmers without active management, HMRC may treat it as an investment business ineligible for relief.

Understanding the APR/BPR distinction matters for valuation and strategic planning. Some farmers with estates near the threshold may choose to reduce non-qualifying assets—selling excess machinery, reducing livestock numbers, or restructuring diversified businesses—to maximize the benefit of the reliefs.

For complex estates with substantial diversified businesses, professional advice is essential. The boundary between trading businesses (100% BPR) and investment activities (no BPR) can be unclear, and HMRC challenges this area regularly.

Lifetime Gifts and the 7-Year Rule for Farmers

Gifting your farm during your lifetime is one of the most effective ways to reduce inheritance tax, but the April 2026 reforms significantly affect how this works.

The general rule: gifts made more than 7 years before death fall completely outside your estate for inheritance tax purposes. If you gift your farm to your children and survive 7 years, there's no inheritance tax regardless of the property's value.

However, according to the government's reform summary, gifts made on or after 30 October 2024 are subject to the new APR cap (£1 million at 100% relief, 50% relief above) if the donor dies on or after 6 April 2026 within 7 years of making the gift.

This timing creates urgency for succession planning. Farmers who gift now need to survive until at least 2031 (7 years from 2024) to get the full benefit. If they die within 7 years after 6 April 2026, the £1 million cap applies to the gifted property.

Thomas, 58, gifts his £2.2 million farm to his son Ben in November 2024. Thomas continues to help on the farm, but Ben runs it completely and Thomas pays no rent. If Thomas dies in 2029 (within 7 years but after 6 April 2026), the new APR cap applies: £1 million at 100% relief, £1.2 million at 50% relief, leaving £600,000 taxable at 40% = £240,000 inheritance tax on the gifted farm.

Margaret, 64, gifts her £1.8 million farm to her daughter in 2025 and moves to a cottage in the village (not on the farm). If Margaret survives 7 years to 2032, the entire £1.8 million is outside her estate—no inheritance tax regardless of APR rules. The gift falls away completely.

Richard gifts his farm to his son but continues living in the farmhouse rent-free and helping with lambing season. This is a "gift with reservation"—it stays in Richard's estate for inheritance tax purposes because he hasn't truly given it away. He's still benefiting from the property.

Avoiding "gift with reservation": If you gift your farm but want to continue living there or working on it, you must either pay market rent to the new owners (your children) or genuinely give up all benefit from the property. Simply helping occasionally may be acceptable, but living there rent-free or farming it yourself keeps it in your estate.

Taper relief (which reduces inheritance tax on gifts made 3-7 years before death) doesn't apply to gifts qualifying for APR or BPR. Either the gift qualifies for relief or it doesn't—there's no gradual reduction.

For farmers over 60 with estates above £1.5 million (single) or £3 million (couples), lifetime gifting should be considered immediately. The earlier you gift, the more likely you'll survive 7 years and avoid inheritance tax entirely.

Practical challenges with lifetime gifts include:

  • Losing control of the farm (it's genuinely no longer yours)
  • Capital Gains Tax on lifetime gifts (though holdover relief may defer this)
  • Family disputes if multiple children have different expectations
  • Continuing to work on the farm after gifting (structure this carefully to avoid gift with reservation)

Professional advice is essential before making lifetime gifts. The tax implications are complex, and mistakes—like creating a gift with reservation—can waste the planning entirely.

How to Plan Your Farm Estate to Maximize APR

Strategic planning can significantly reduce the inheritance tax your family pays while ensuring your farm continues into the next generation. Here are seven practical strategies:

Strategy 1: Spousal Transfer Planning

When the first spouse dies, ensure your will leaves the farm to the surviving spouse, not directly to your children. This uses the unlimited spousal exemption—no inheritance tax on the first death. When the surviving spouse dies, you have combined allowances of up to £3 million (for couples with children) to shelter from tax.

Your will must explicitly structure this spousal transfer. If your will leaves the farm to your children on the first death, you lose the opportunity to combine allowances.

Strategy 2: Lifetime Gifting (with 7-Year Rule)

Gift your farm to the next generation before age 65 if possible. The earlier you gift, the more likely you'll survive 7 years and remove the property from your estate entirely.

Consider partial gifts—gifting a share of a farming partnership each year spreads the Capital Gains Tax exposure and starts multiple 7-year clocks.

Avoid gift with reservation by moving out of the farmhouse or paying market rent if you continue living there.

Strategy 3: Business Structure Optimization

Consider whether holding your farm in a partnership or family company improves tax efficiency. Some structures may offer better Business Property Relief qualification for diversified businesses.

Separating non-qualifying assets (machinery, diversified businesses) from qualifying agricultural property can provide clarity for valuation and relief claims.

Strategy 4: Debt and Liabilities

Farm debts reduce your estate's taxable value. A £2 million farm with a £500,000 mortgage has a £1.5 million net estate value for inheritance tax purposes.

Strategic use of mortgages for legitimate farm investment can reduce the taxable estate, but don't over-leverage—you still need to service the debt from farm income.

Strategy 5: Environmental Land Management

From 6 April 2025, land managed under environmental agreements qualifies for APR. Consider Countryside Stewardship or Environmental Land Management Schemes (ELMS) for land that might otherwise not qualify (such as conservation woodland or rewilded areas).

This maintains APR qualification while potentially generating environmental payments to supplement farm income.

Strategy 6: Succession Planning Conversations

Identify which child or children will farm. If only one child wants to farm, consider lifetime transfer of the farm to that child, with cash or other assets to non-farming children.

Document your intentions clearly in your will to reduce disputes. Family conflict over farm inheritance can force sales even when tax planning would have worked.

Strategy 7: Regular Valuation and Review

Farm values fluctuate based on agricultural markets, development potential, and land use changes. Review your estate plan every 3-5 years or after major changes (purchasing land, diversifying businesses, changes in family circumstances).

Ensure you maintain APR qualification by meeting the 2-year (owner-occupied) or 7-year (let land) occupation requirements continuously.

When Professional Advice is Essential

Consult a solicitor specializing in agricultural law and a chartered tax adviser if:

  • Your estate exceeds £1.5 million (single) or £3 million (couples)
  • You have complex ownership (multiple family members, companies, trusts)
  • You operate substantial diversified businesses (farm shop, holiday lets, renewable energy)
  • You have cross-border complications (Scottish farms, assets in different UK jurisdictions)

William and Barbara, both 67, own a £3.4 million Worcestershire farm jointly. Their plan:

  1. Ensure their wills leave the farm to the surviving spouse (first death tax-free via spousal exemption)
  2. Surviving spouse's estate: £3.4 million farm minus £3 million combined allowances = £400,000 taxable
  3. £400,000 gets 50% APR relief, leaving £200,000 taxable at 40% = £80,000 tax (payable over 10 years at £8,000 annually)
  4. Alternative strategy: Gift a £400,000 share to their children now; if William and Barbara survive 7 years, the entire farm passes tax-free

Why Every Farmer Needs a Will for APR Planning

Agricultural Property Relief doesn't apply automatically—it requires proper estate planning through a valid will. Without a will, intestacy rules can destroy decades of succession planning and force farm sales even when tax reliefs would have worked.

Why Wills Matter for APR

Spousal transfer: Without a will, intestacy rules may not give your entire farm to your spouse. If you have children, your spouse receives your personal belongings plus the first £322,000 plus half the remainder. The children receive the other half immediately. This splits farm ownership and can force a sale to give children their inheritance.

APR qualification: Your executor needs clear instructions about which assets qualify for APR versus Business Property Relief. A well-drafted will provides this clarity and ensures reliefs are claimed correctly.

Farming versus non-farming children: A will lets you specify that the farming child inherits the farm while non-farming children receive cash, investments, or other assets. Without a will, intestacy splits everything equally by value, which often means selling the farm.

Timing: Executors must claim APR when applying for probate. Your will provides the documentation showing occupation requirements were met and the farm qualifies.

Business continuity: A clear succession plan in your will avoids disputes that could force farm sales during estate administration.

Intestacy Disaster Scenario

David dies without a will, owning a £2.1 million farm. His wife Sarah survives him, plus two adult children.

Under intestacy rules for England and Wales:

  • Sarah inherits: Personal items + £322,000 + half the remainder (£889,000) = £1,211,000
  • Children inherit: £889,000 equally (£444,500 each)

The problem: The farm is now jointly owned by Sarah and two children. To pay the children their £889,000 inheritance in cash, the farm may need to be sold or mortgaged heavily. Even though APR reduces the inheritance tax bill, the family structure forces a sale of land that's been farmed for generations.

What a Proper Farm Will Should Include

  • Clear spousal transfer provisions (entire farm to spouse if that's your intention)
  • Specific bequests identifying farmland, equipment, and diversified businesses separately
  • Guardianship provisions if you have minor children
  • Executor powers to continue running the farm during estate administration
  • Trusts for minor or disabled beneficiaries if needed
  • A letter of wishes explaining your succession intentions (who should farm, how to treat farming and non-farming children fairly)

When a DIY Will Works Versus When You Need a Solicitor

WUHLD Online Will Suitable For:

  • Straightforward farm estates under £1.5 million (single) or £3 million (couples)
  • Clear beneficiaries (spouse, then children)
  • No complex trusts or business structures
  • Farm owned outright individually or jointly (not via complex company structures)

Solicitor Needed For:

  • Estates significantly above £1.5 million (single) or £3 million (couples) thresholds
  • Multiple properties (farms in different locations, overseas assets)
  • Complex ownership (family limited partnerships, trusts, holding companies)
  • Disabled beneficiaries needing special trusts
  • Blended families with farming and non-farming children from different marriages
  • Cross-border issues (Scottish farms with different succession laws, Northern Irish property)

Understanding Agricultural Property Relief is essential—but it only works if your will is structured correctly. Even farms under the £1.5 million threshold need clear succession planning to avoid intestacy disasters and family disputes.

WUHLD's online will service helps you create a legally valid will in just 15 minutes for £99.99 (compared to £650+ for a solicitor). You'll receive your complete will plus three essential guides: a 12-page Testator Guide, a Witness Guide, and a Complete Asset Inventory document. You can preview everything free before paying anything.

For straightforward farm estates, WUHLD provides an affordable starting point. For complex estates above £3 million or involving trusts and companies, consult a specialist agricultural solicitor in addition to having a basic will in place.

Preview Your Will Free – No Payment Required

Frequently Asked Questions

Q: What is Agricultural Property Relief (APR) in the UK?

A: Agricultural Property Relief is an inheritance tax relief that allows you to pass on qualifying agricultural property at reduced or zero tax rates. From April 2026, 100% relief applies to the first £1 million of combined agricultural and business property, with 50% relief on amounts above that threshold. The property must be working farmland used to grow crops or rear animals.

Q: What are the main changes to APR from April 2026?

A: From 6 April 2026, the 100% inheritance tax relief is capped at £1 million of combined agricultural and business property. Assets exceeding this receive only 50% relief, meaning an effective tax rate of 20% (half the standard 40% rate). Tax can be paid interest-free over 10 years. Around 500 farm estates annually are expected to pay more tax under these changes.

Q: How much farmland can I pass on tax-free under the new APR rules?

A: A single farm owner can pass on up to £1.5 million tax-free to children or grandchildren (£500,000 standard allowances plus £1 million APR). A farming couple can pass on up to £3 million tax-free when combining allowances. This includes the nil-rate band (£325,000), residence nil-rate band (£175,000), and the new £1 million APR threshold per person.

Q: What property qualifies for Agricultural Property Relief?

A: Qualifying property includes land or pasture used to grow crops or rear animals, farm buildings, cottages occupied by farm workers, and farmhouses (if character-appropriate). The property must be part of a working farm in the UK and owned and occupied for agricultural purposes for 2 years (if owner-occupied) or 7 years (if let to tenants).

Q: Does Agricultural Property Relief apply to farm equipment and livestock?

A: No, APR only covers the agricultural land and buildings themselves. Farm equipment, machinery, livestock, and harvested crops don't qualify for APR. However, these assets may qualify for Business Property Relief (BPR) instead, which has the same £1 million combined threshold from April 2026.

Q: Can I avoid inheritance tax on my farm by gifting it during my lifetime?

A: Yes, if you gift your farm and survive for 7 years after the gift, it falls outside your estate for inheritance tax purposes. However, gifts made on or after 30 October 2024 are subject to the new APR rules if you die on or after 6 April 2026 within 7 years of making the gift. Early succession planning is crucial for larger farm estates.

Q: Will environmental land management agreements qualify for APR?

A: Yes, from 6 April 2025, APR extends to land managed under environmental agreements with government bodies and approved responsible bodies. This recognizes that environmental stewardship is a legitimate agricultural use. The land must still meet the standard ownership and occupation requirements to qualify.

Conclusion

Your farm represents more than land and buildings—it's generations of family history, hard work, and rural heritage. The April 2026 Agricultural Property Relief changes mean inheritance tax planning is more important than ever for farming families. But with the right combination of spousal transfers, lifetime gifts, and a properly structured will, most farm estates can still pass to the next generation without forcing a sale.

Key takeaways:

  • From April 2026, only the first £1 million of combined agricultural and business property receives 100% inheritance tax relief; amounts above that get 50% relief (20% effective tax rate)
  • APR covers agricultural land, farm buildings, and character-appropriate farmhouses—but NOT equipment, livestock, or harvested crops (those may qualify for Business Property Relief)
  • A single farmer can pass £1.5 million tax-free; farming couples can pass £3 million by combining spousal exemptions, nil-rate bands, and APR
  • Lifetime gifting (surviving 7 years) removes property from your estate entirely—but gifts after 30 October 2024 are subject to the new cap if you die within 7 years after 6 April 2026
  • APR only works if your will is properly structured—intestacy rules can force farm sales and destroy succession planning

Create your farm succession will today. With WUHLD, it takes just 15 minutes online.

For £99.99 (compared to £650+ for a solicitor), you'll get:

  • Your complete, legally binding will
  • A 12-page Testator Guide
  • A Witness Guide
  • A Complete Asset Inventory document

You can preview your entire will free before paying anything.

Preview Your Will Free – No Payment Required

If your farm estate exceeds £1.5 million (single) or £3 million (couples), or involves complex structures (trusts, companies, multiple properties), we recommend consulting a specialist agricultural solicitor in addition to creating your basic will. WUHLD handles straightforward estates; complex APR planning requires professional advice.

  • What Happens If You Die Without a Will in the UK? - Understand intestacy rules that can destroy farm succession plans
  • Do I Need a Will If I Own Property? - Why property owners (including farmland) must have wills
  • Inheritance Tax Explained: Complete UK Guide 2025 - Understand the broader inheritance tax system and how APR fits within it
  • How to Reduce Inheritance Tax Legally - Strategies beyond APR for minimizing inheritance tax

This article provides general information about Agricultural Property Relief and UK inheritance tax law. It is not legal, tax, or financial advice and should not be relied upon as such. Agricultural Property Relief rules are complex and subject to change—the April 2026 reforms are based on current government announcements and may be amended. Laws vary across the UK (England, Wales, Scotland, Northern Ireland), and individual circumstances differ significantly.

For advice specific to your farm estate, consult a qualified solicitor specializing in agricultural law and a chartered tax adviser. WUHLD's online will service is suitable for straightforward UK estates; farms with complex ownership structures, trusts, substantial diversified businesses, or estates significantly above the £1.5 million (single) or £3 million (couples) thresholds require professional legal and tax advice.

All inheritance tax thresholds, APR/BPR qualifying criteria, and tax rates are subject to change by HM Revenue & Customs and UK legislation.

Legal Disclaimer:

This article provides general information only and does not constitute legal or financial advice. WUHLD is not a law firm and does not provide legal advice. Laws and guidance change and their application depends on your circumstances. For advice about your situation, consult a qualified solicitor or regulated professional. Unless stated otherwise, information relates to England and Wales.

Sources:

This article references the following sources:

All sources accessed November 2025.