The changing rules for transferring farms

Agricultural relief has been available from gift and inheritance tax since the introduction of Capital Acquisition Tax (CAT) in 1976.

Many processes of transferring farms to the next generation have suddenly been brought to a halt by farm families. With their tax and legal advisers, they have been poring over the legalese in the Finance Bill published last Thursday, for clarification of the amendments to agricultural relief announced in Budget 2025.

Agricultural relief has been available from gift and inheritance tax since the introduction of Capital Acquisition Tax (CAT) in 1976. The purpose of this relief is to facilitate succession and the intergenerational transfer of farm enterprises. It operates by charging the tax on a reduced market value (referred to as "agricultural value"), whereby market value is reduced by 90%.