Farmers and business owners seek judicial review on IHT plans

A group of farmers and business owners has called for a judicial review of government proposals to levy inheritance tax (IHT) on farmland and family businesses.

The plans, announced in last autumn’s Budget and scheduled to come into force in April 2026, would cap Agricultural Property Relief (APR) and Business Property Relief (BPR) at £1m, with 50 per cent relief on amounts over £1m (meaning 40 per cent tax would apply to 50 per cent of the value of business and agricultural property over £1m).

The claimants argue the government should have conducted sector-wide consultation prior to rolling out its proposals and, without this, was at risk of implementing “flawed legislation”.

They are now seeking the High Court’s permission to challenge Chancellor Rachel Reeves’ decision to run only a technical consultation on narrow aspects of the changes, which they say constitutes a failure of her “public law duties”.

James Austen, a partner at Collyer Bristow, the law firm bringing the challenge, said the claimants felt the government “should be held to its public law obligations on matters of tax policy”.

He added: “This claim does not seek to overturn the government’s decision to amend APR or BPR but asks that affected individuals and groups can contribute to a proper consultation exercise to ensure the government has the best possible evidence when developing its tax policy for UK farms and businesses.”

In May this year, Parliament’s Environment, Food and Rural Affairs (EFRA) Committee called on ministers to postpone making any final decisions on APR and BPR changes until October 2026, and to delay any new rules coming into force until April 2027.

The committee suggested this scheduling change would, “allow for better formulation of tax policy and provide the government with an opportunity to convey a positive long-term vision for farming,” while also giving those likely to be affected additional time to make plans and seek professional advice.