What the New Inheritance Tax Rules Mean for Your Farm

Ask a farmer what the business is worth and they’ll struggle to tell you in money they could lay their hands on by Friday. The wealth is real. It’s standing in the fields and parked in the sheds. It just isn’t liquid, and for most of agricultural history that distinction never troubled HMRC. From 6 April 2026, it does.

The rules on Agricultural and Business Property Relief changed for the first time in more than forty years. Full inheritance tax relief now covers the first £2.5 million of qualifying assets per person, up to £5 million for a married couple, with a reduced rate above that threshold. The detail belongs in a conversation with your accountant. The direction of travel doesn’t need one explained: some farms now face a future tax bill where none existed before.

The harder problem isn’t the size of the bill. It’s where the money to pay it comes from. A farm can be worth several million on paper and still struggle to find five figures in cash without selling something. If a liability has to be met and the farm has no spare liquidity, land or equipment becomes the fallback — exactly the outcome generations of succession planning were meant to prevent.

That makes flexible cash a different kind of asset than it used to be. Worth considering now:

• Reviewing succession plans early, with proper professional advice
• Keeping working capital free rather than locked into equipment
• Spreading the cost of machinery so reserves stay intact
• Avoiding large one-off outlays that quietly narrow your options later

The connection to how you buy kit is more direct than it looks. Paying outright removes cash from the business in a single stroke — cash that, after April, may be doing more important work sitting in reserve. Financing keeps the equipment working for you while the money stays where it has the most flexibility to matter.

We’re not tax advisers, and the inheritance question is one for your accountant. But on the cashflow side of this, it’s exactly where we can help. Buckingham Leasing spreads the cost of equipment so more cash stays in the business and your reserves remain available for whatever the years ahead actually demand of them — succession included.