Is there change afoot for England’s famously green and pleasant land? Some experts are saying the 2024 Autumn Budget could result inmore farmland becoming available for renewable energy projects.
According to renewable energy specialist Gareth Phillips, the modifications to inheritance tax could mean more agricultural land changing use. This is in the wake of major reforms to agricultural property relief (APR) and business property relief (BPR).
The planned changes are designed in theory to balance the need to increase government revenue – as part of a broader £40 billion tax rise – with preserving small family farms and related businesses.
The government estimates that the new tax regime will affect around 25% of estates each year from 2026-27, with approximately 500 out of 2,000 estates eligible for APR. Effective from April 2025, APR will include land managed under environmental agreements with the UK government and other public bodies, which it is envisaged could support sustainable farming and environmentally beneficial stewardship wherever suitable.
As of April 2026, combined business and agricultural assets will be exempt from inheritance tax up to £1 million. For assets above this threshold, the relief will change from 100% to 50%, which for affected estates will mean an ‘effective’ tax rate of 20%. This could incentivise some farmers to sell more land to multi use development or leasing to renewables, thereby increasing revenue and funding looming inheritance tax payments.
For further information on agricultural inheritance tax planning in Cheshire, contact our team at Hartey Wealth Management today.
