The farming world has, quite understandably, been up in arms over the budget proposals to make far-reaching changes to Inheritance Tax (IHT) and commentary has predictably concentrated on planned amendments to Agricultural Property Relief (APR). However, it is important to appreciate that the £1million limit detailed in the Government’s initial proposal also includes Business Property Relief (BPR). When the Treasury worked its figures on APR applications to assess the potential impact of the changes, what it overlooked was all the farming claims for BPR. Farmland is eligible for APR but many other farming assets are not and diversified farm enterprises, such as a farm shop or renewable energy installations, are currently likely to be eligible for BPR. Traditionally, farm livestock, machinery and equipment don’t qualify for APR but they are business assets that should qualify for BPR under the current regime. So, these don’t appear on statistics for APR but they are very important reliefs for a working farm. For example, a reasonable-sized dairy farm could have £1 million worth of livestock and £500k worth of machinery; a poultry unit could have vast sums tied up in housing equipment and machinery; and an arable farm could easily have £1 million or more invested in machinery. The net result would be that all the reliefs would be used up even before we get to consider any land holdings.
What this means is that the value of farm live and dead stock will become far more important when considering potential IHT liabilities. Historically, with full BPR available, it may sometimes have been perceived that there was no need for absolute accuracy in the values of live and dead stock. Often the figures in the accounts that would be used in a probate application might have been out of date or written down with depreciation and therefore not representative of market value. It will be a brave solicitor, after April 2026, who submits a probate application which includes values for live and dead stock without a formal valuation from an agricultural valuer. An accurate, current assessment of the value of live and dead stock is likely to become key to all future probate applications and I would point out that members of the Central Association of Agricultural Valuers (CAAV) are uniquely qualified and experienced to give expert advice on the valuation of all farming assets.