Northern Ireland farmers fearful of IHT impact

Inheritance tax changes are taking a growing toll on Northern Ireland’s farming families, with almost nine in 10 reporting increased stress and widespread fears over farm succession.

A survey by the Ulster Farmers’ Union (UFU) found 89% of respondents reported increased family stress or worry, including 60% who described that impact as “significant”.

See also: Farmers devalue holdings over IHT fears, poll finds

The findings, published on Friday (16 October), come ahead of the Autumn Budget on 28 October, with the union urging chancellor John Healey to reconsider changes to agricultural property relief (APR) and business property relief (BPR).

Conducted as part of the UFU’s A Budget to Back Farming campaign, the survey examined the impact of the reforms on farm succession, investment and family wellbeing.

More than 71% of respondents said they were less confident their farm could be passed to the next generation as a financially viable business.

Meanwhile, 58% expected the changes to create or increase an inheritance tax (IHT) liability, with 37% anticipating bills of at least £100,000 and almost a quarter expecting £250,000 or more.

Almost half (49%) said their intended successor had become less willing or financially able to take over the business, or both.

Investment concerns

The survey also suggests the reforms are already affecting farm investment, with 42% of respondents having reduced, postponed or cancelled spending, or taking steps to do so.

UFU president John McLenaghan said the findings demonstrated the immediate consequences of the policy.

“This is not a problem waiting to happen when a farmer dies. The damage is happening right now,” he said.

“Money that should be going into farm buildings, environmental improvements, increasing efficiency, and the future of food production is instead being held back as families try to prepare for potential tax liabilities.

“Every investment that does not happen has consequences, not only for the farm but for the wider rural economy.”

Budget demands

Under the IHT reforms, introduced in April 2026, 100% relief on qualifying agricultural and business assets is restricted to a £2.5m allowance per individual (£5m for married couples or civil partners), with relief above this threshold reduced to 50%.

The government has maintained that 85% of estates claiming agricultural property relief in 2026-27 will pay no more IHT.

However, the UFU survey found 84% of respondents wanted reversing the changes to be a priority in the forthcoming Budget.

Mr McLenaghan said: “We cannot afford to lose the next generation of food producers because of a tax policy that fails to recognise the realities of farming.”

The union plans to present its findings to parliamentarians ahead of the Budget, seeking changes to protect succession and investment.