On April 6 2026, we entered into the new Inheritance Tax (IHT) regime, where it is more likely that tax will be payable on a death, and the process of dealing with the estate of a loved one will be much more complex and stressful, particularly for farming families.
As a result of the recent reforms, 100% combined Agricultural Property Relief (APR) and Business Property Relief (BPR) is now limited to £2.5m per person, or £5m for a married couple, with 50% relief on any excess.
Why probate may feel harder after April 2026
Although the allowance was increased from £1m, meaning many f.arming families will not have an increased IHT liability under the new regime, even where APR and BPR still apply, the process will be more document-heavy, with more formal IHT reporting, detailed valuations and tighter timescales, and the steps to secure probate can feel daunting at the worst time.
Crucially, everything is linked. The valuer’s figures affect the accounts; the accounts affect the IHT position; and probate cannot progress until the IHT process is sufficiently advanced.
How IHT reforms change what happens after death
Turning to how the new regime works in reality, here are a few tips on how to deal with probate and Inheritance Tax. Every estate is different, but most families will need to consider the following:
1. Start valuations early
Most farmers will require a full Inheritance Tax form to be submitted, even if all assets are eligible for 100% APR/ BPR.
Hence, valuations of all assets will be required, and so it is important to appoint a valuer at an early stage.
These valuations will feed into the valuation of your partnership share or company share valuation, so it is crucial that your accountant and valuer collaborate.
2. Prepare and submit IHT return with evidence
Any IHT liability can be paid in instalments over 10 years, but the first payment is due six months after the date of death.
The solicitor cannot apply for probate until the IHT forms have been completed.
This means all valuations, preparation of accounts, and forms need to be completed much quicker than under the old system.
Previously, it was common for estimated or historic valuations to be used for IHT purposes.
3. Clearly document the estate story
In the case of farming partnerships, make sure there is full understanding of who owns all the property, and whether it is a partnership asset or owned personally.
This should be included in the partnership agreement, which all farming partnerships should have, and this issue should be dealt with long before a death occurs.
4. Make sure common areas of challenge from HMRC are considered before submitting the IHT forms
These include:
- Whether all farmhouses occupied by a working farmer?
- If any of the property has “non-agricultural” value?
- If any of the farm buildings are not occupied for the purposes of agriculture?
- Whether the partnership balance sheet includes any “excepted” assets such as surplus cash or unused property.
Take action now
It is essential to act quickly when dealing with Inheritance Tax and Probate claims, and to make sure that all your professional advisers collaborate to ensure the process is as painless as possible.
This means it is important now to ensure your partnership agreement is up to date, that you have a clear schedule of partnership assets and clarity on who owns the farmhouse, cottages, land and any let property.
If some information is not available, this process can take weeks longer, and the IHT position may change depending on what information is supplied
