County Fermanagh countryside. Picture: Cliff Donaldson
Following the request of the Ulster Farmers’ Union, DAERA has delivered further analysis that shows approximately half of family farms in Northern Ireland, accounting for 80% of farmed land, could be impacted by the changes to Agricultural Property Relief (APR) and Business Property Relief (BPR).
As part of the UK autumn budget, the government introduced a cap of £1 million on APR and BPR at 100% relief, with the remaining value of agricultural and business property above this threshold eligible for relief at 50%. This change effectively imposes an inheritance tax rate of 20% on property values exceeding £1 million and is set to come into effect from 6 April 2026.
Key findings from DAERA’s in depth analysis shows:
- Over 48% of NI farms exceed the £1 million threshold, with valuations averaging £21,000/acre for agricultural land, farm buildings, residential property, and working capital by 2026.
- These larger farms, which make up less than half of all farms, account for 80% of NI’s total farmland and 90% of dairy cows, 80% of total cattle, 70% of beef cows and 70% of sheep with many farm families now facing significant inheritance tax bills.
- Even under a potential £2 million threshold (where farm assets are split between two individuals), 25% of NI farms remain above the limit, including 58% of total farmland, 73% of dairy cows, and 55% of total cattle.
UFU president William Irvine said, “To support our lobbying to overturn the family farm tax, we requested DAERA to provide data that would show just how disproportionately NI farms will be affected by the changes to APR and BPR. DAERA’s thorough analysis takes into account residential property, farm buildings, machinery and livestock as well as land, increasing the average land value estimations from £15,000/acre to £21,000/acre. This means that the initial figure that a third of NI farms would be affected, has now risen to around 50%.
“The analysis underscores the devastating impact that the inheritance tax changes will have on NI family farms, many of which have been passed down through the generations. The tax changes will compound the financial strain farm families are already under.
“Farming is the cornerstone of our rural economy. NI agriculture is worth £6 billion to the local economy and the agricultural pound reaches every sector within NI’s communities. Yet this decision taken by the UK government has totally undermined the significance and contribution of our industry, and has failed to recognise the unique challenges faced by farm families in this region including the high value of agricultural land and assets.
“With DAERA’s data providing further verification, the UFU is urging the UK government to act urgently, to reconsider the family farm tax and recognise the disproportionate impact it would have on our farming community. The current policy has too many risk factors, from discouraging succession planning, threatening the viability of family farms and potentially undermining agriculture’s ability to contribute to food security and sustainable rural development. Farm families should not be penalised for their contribution to the economy, environment and rural communities. It is unjust and would be detrimental to UK society.”
