At a debate at Westminster on Monday, a number of NI MPs made the case for an annual uplift to be applied to new thresholds for agricultural and business property relief (APR/BPR) from inheritance tax (IHT).

From 6 April 2026, a new £2.5m limit is planned. It can be transferred to a surviving spouse or civil partner, so for a married couple, there is a £5m limit before other IHT allowances are applied.

When compared to the original proposal of a £1m APR/BPR threshold, announced at the autumn budget in October 2024, it is a significant win for farm lobby organisations.

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However, government has confirmed the new £2.5m threshold (as well as other IHT allowances) is fixed until April 2031. From that point onwards, the draft legislation allows for the thresholds to increase in line with the Consumer Price Index (CPI), which is a measure of inflation in the wider economy.

Proceedings

During the latest stage of proceedings on Monday as the enacting legislation (the Finance Bill) passes through the House of Commons, a number of amendments were put forward by opposition MPs. Those amendments include that APR should be uprated annually in line with changes in the value of agricultural land.

Speaking during the debate, Upper Bann MP Carla Lockhart said the failure to index-link APR was “a glaring omission”, adding that land recently sold in her constituency for £32,000 per acre.

“A static threshold in a rising land market guarantees that more and more family farms will be dragged into the inheritance tax net year after year,” she said.

TUV leader, Jim Allister, also took aim at the policy, describing it as a “diminishing win” and pointing out that in the last five years, NI land values are up 40%.

“If that trajectory continues for the next five years, in today’s terms the threshold will be worth only £1.5m,” said the north Antrim MP.

In her contribution, Lagan Valley MP Sorcha Eastwood called for government to publish a NI-specific assessment of the impact of the changes to APR.

She said DAERA analysis does show that at an APR threshold of £5m for a married couple, current estimates are that only 5% of farms would be impacted.

However, those 5% of farms still account for 27% of the NI farmed land area.

Other amendments

As well as proposed amendments relating to thresholds, other changes put forward by MPs would have dealt with anti-forestalling measures included in draft legislation.

Under those measures, where a farmer dies on or after 6 April 2026, the rules around lifetime transfers apply from 30 October 2024 (the date the policy was announced).

This means an elderly or terminally ill farmer, with significant assets is potentially caught in a trap, as they have limited ability to pass on assets by using the seven-year rule.

Vote

In the end, all the various opposition amendments were voted down by Labour MPs. The government amendment which increases APR / BPR thresholds from £1m to £2.5m was voted through by 344 to 181.