Topic of the month

Farm tenancy restructuring and the role of the first Commissioner for the Tenant Farming Sector

There are currently problems for both farm landlords and tenants with regard to the viability of farm leases and tax efficiency. With a tenancy the landlord has the advantage of regular income and the potential to avoid the financial outlays associated with farming in hand. However, the landlord also faces the risk of the Agricultural Relief (AR) for Inheritance Tax (IHT) being restricted to 50 per cent, with no AR available for the farmhouse. With the increase in the threshold to £2.5 million for 100 per cent Business Relief (BR) and AR this is an important consideration, as farming families have to maximise the 100 per cent IHT threshold as much as possible (see "The road to the IHT U-turn" in FTB, May 2026).