The bad news is that Wednesday’s budget did not include a reversal, or an increase, of the £1 million cap on the combined value of assets that qualify for 100% Agricultural Property Relief (APR) and Business Property Relief (BPR). This is a massive blow to the industry and is despite over a year of lobbying and farmer protests since this was announced in last October’s Budget.
One crumb of good news, is that the £1million allowance before inheritance tax is to be paid can now be transferred between spouses in the same way that existing Nil Rate Bands and Residential Nil Rate Bands can be. This will mean there is not as much pressure to change wills and land ownership but doesn’t reduce the total IHT risk. One major benefit of this change appears to be that surviving spouses can benefit from their deceased partner’s transferable nil rate band so Widows and Widowers will benefit from £2 million of APR/BPR nil rate band. Obviously, we await the small print and legislation to confirm this.
Other announcements in the budget included an increase in the Minimum Wage rates from 1st April 2026 for:
- Workers aged 21 and over - from £12.21/hour to £12.71/hour
- Workers aged 18 to 20 - from £10/hour to £10.85/hour
- Workers aged 16 to 17 and apprentices - from £7.55/hour to £8/hour.
Fuel duty will remain frozen but only until September 2026. After then, the five pence cut introduced in 2022 will be reversed in a “staggered approach”. From April 2027, fuel duty will be increased in line with the Retail Prices Index (RPI).
The government is increasing taxes on income from property and savings from 6th April 2027 and new rates on dividend income will apply from 6 April 2026. From April 2027, if you are under 65 you will only be able to invest up to £12,000 in a cash ISA with the remaining £8,000 ISA allowance to be invested in stocks and shares ISAs. More details are here.
This is a summary of some of the main points in the budget of relevance to farmers – it is important to take professional advice particularly on IHT!
