Galbraith says famers and landowners will need to re-examine their existing tax arrangements, following changes to the thresholds for Agricultural Property Relief and Business Property Relief payable as inheritance tax announced today by the Chancellor.

The firm reports that in addition to existing nil-rate bands and exemptions, from April 2026, the first £1m of combined business and agricultural assets will continue to attract no inheritance tax, but for assets over £1m inheritance tax will apply with 50% relief, at an effective rate of 20%, the Chancellor confirmed.

Almost three-quarters of inherited estates claiming agricultural property relief and the majority of inherited estates claiming business property relief in 2026 to 2027 are expected to be unaffected by these reforms as they  lie below this threshold, according to Galbraith.

However, a significant number of commercial farms above this value will fall within the new tax threshold from April 2026, so some prudent financial planning will be required, Galbraith reports.

David Corrie, Head of Estate Agency for Galbraith, said: “The budget confirmed the expectation that changes to Inheritance and Capital Gains Tax were likely, both of which significantly impact the farming community. These changes will place many farm businesses into an increased tax liability position. Capital Gains Tax changes are effective immediately, and Inheritance Tax changes commence in April 2026, which allows some time to re-consider previous asset transfer plans.

“Careful consideration on future planning needs to be made now more than ever, in conjunction with the relevant professional advisors across the sector.

“This may include transfers of assets within the farming business or even disposals of assets within  certain thresholds. Landowners should take financial advice to mitigate any potential impact, and be careful not to create liability where none may exist currently.”

The other changes announced today provide a mixed picture for the land and property sector in Scotland and the north of England, Galbraith reports.

These include:

Stamp duty rise in England and Wales, effective from tomorrow – the stamp duty land surcharge for second-homes will increase, by 2% to 5%. Galbraith responded that this represents a significant increase for England’s second home property market and may influence buying decisions. In Scotland, the additional dwelling supplement, set at 6%, has been in place since April 2022. This has influenced some buying decisions.

Extension of the Inheritance Tax threshold freeze for a further two years to 2030. Galbraith welcomes this news for the residential property sector, as it does not significantly disrupt existing arrangements or plans that domestic families may have put in place.

Capital Gains Tax – the main rates of Capital Gains Tax are increasing from 10% to 18% and 20% to 24% respectively, on assets  other than residential property for disposals made on or after 30 October 2024, which is an immediate change in the tax regime in this sector. This now brings these rates in line, with residential property rates remaining at 18% and 24%.