Inheritance Tax Cap Expected to Affect Northern Ireland Farms

Andrew Muir, the Agriculture, Environment and Rural Affairs Minister, stated that the budget’s decision to cap Agricultural Property Relief for inheritance tax at £1 million would have a detrimental effect on farmers in Northern Ireland. During a session of Minister’s Questions, Muir informed the Assembly that approximately one-third of Northern Ireland’s farmers are projected to be impacted by this alteration. He further noted that this proportion is expected to be significantly greater within the region’s dairy industry, potentially reaching 75%. On Monday, he held a meeting with Secretary of State Hilary Benn, where he requested a “rethink” regarding what he characterized as “a bad budget for farmers”. Following the discussion, Muir commented that the modifications to tax policy, alongside the declaration that funding for agriculture and fisheries would no longer be ringfenced, had generated “real concern” among the farming community locally. He added, “I urged him [Benn} to reconsider these policies and engage with the farming community to respond to the concerns being raised.” The Secretary of State had previously defended the first Labour Budget in 14 years and its implications for the agricultural sector. Chancellor Rachel Reeves declared that, although combined business and agricultural assets valued under £1 million would remain exempt from inheritance tax, assets exceeding this amount would incur a 20% tax rate starting April 2026, which is half the standard inheritance tax rate.