Around half of all farms in Northern Ireland - accounting for 80% of farmed land - could be affected by the inheritance tax changes announced as part of the UK budget in October.

The Department of Agriculture, Environment and Rural Affairs (DAERA) has undertaken a deeper analysis into the impacts of the tax changes, taking into account residential property, farm buildings, machinery and livestock, as well as land.

This increased the average land value estimations from £15,000/acre to £21,000/acre, taking the number of farms potentially affected from one third to around half.

Speaking of this comprehensive analysis, agriculture minister Andrew Muir said initial data found by his department painted a worrying picture.

“But this deeper study has truly revealed the stark reality of how many hard-working farmers could be impacted by the inheritance tax changes,” he said.

“I stand firmly with the agriculture sector in calling for these damaging changes to be reversed. Northern Ireland will be disproportionately impacted due to the makeup of our agri sector and it cannot continue.”

Inheritance tax

As part of the UK budget on 30 October 2024, it was announced that agricultural property relief (APR) and business property relief (BPR) combined at 100% would be restricted to £1m from 6 April 2026.

Analysis previously undertaken by the department based on a land value of £15,000/acre in 2026 showed that around one third of farms would have a total land value exceeding £1m and therefore would be affected.

“My department’s analysis is at odds with the Treasury figures presented, which relate to 2021/22 claims for APR and BPR and almost certainly a major underestimation of the impact,” Muir said.

“I have serious concerns with their use to measure the impact of the changes announced in the budget. The context will be very different from 6 April 2026, with much more attention being given to agricultural and business property values.”

New analysis

Using a £2m limit, one quarter of farms would be affected, but these farms still account for over half of the area farmed in Northern Ireland.

“I again urge the UK government to turn back and reconsider the planned tax changes given the disproportionate impact on family farms, particularly in Northern Ireland,” added Muir.

“The ability to pass farms down through generations of farming families is crucial to securing the future of our agri-food sector.”