How Inheritance Tax Concerns Are Driving Farmland Sales
The upcoming autumn budget on 30 October is expected to bring changes to inheritance tax treatment that are already prompting some landowners to put their land up for sale, according to data from Farmers Weekly. The magazine’s land tracker shows a slight decrease of 1% in the number of acres advertised compared to last year, with approximately 75,000 acres advertised so far. However, there has been a significant increase in land advertised in the past week alone, with over 6,000 acres listed, a 28% jump from the same period last year.
Industry experts believe that changes to Agricultural Property Relief (APR) on inheritance tax for farm businesses could be on the horizon. Gavin Jones, a chartered financial planner at accountant Old Mill, predicts potential changes such as reducing the rate of relief or implementing a lifetime limit to cap the value of the relief. There could also be adjustments to the interaction of business or agricultural relief with capital gains tax.
In response to inheritance tax concerns and debt reduction, land agent GSC Grays has listed double the amount of land for sale in 2024 compared to the same period last year. Head of land and farm sales, John Coleman, notes that capital taxes, especially inheritance tax, greatly impact farms and farmland. Anticipated changes in inheritance tax laws could lead landowners to reassess how they manage their farms, particularly affecting the tenanted sector.
Factors such as high interest rates, reduced income from direct payments, and significant debts in the farming industry are driving an increase in smaller blocks of land coming to the market as businesses seek to restructure. Coleman highlights that evolving priorities, including debt reduction, tax concerns, and changing agricultural policies, are influencing decision-making. However, he points out that opportunities for landowners to adapt and thrive in the evolving landscape are emerging, such as through natural capital and environmental credits.
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Maria Sanchez completed her Bachelor’s degree in Plant Sciences from the University of California, Davis, in the USA. Her studies focused on plant genetics and biotechnology, with an emphasis on developing disease-resistant crop varieties. Maria has contributed to several research projects aimed at improving crop resilience to climate change and is now pursuing her Master’s degree in Plant Breeding.