Inheritance tax changes, announced as part of the UK Autumn Budget 2024, will have “a particularly disproportionate impact on family farms and farming jobs in Northern Ireland compared to other jurisdictions in the UK” a professional accountancy body has warned.
The Chartered Accountants Ireland’s Northern Ireland tax committee today (Friday, April 25) sounded a fresh warning about the restrictions to agricultural property relief (APR)and business property relief (BPR) for inheritance tax that were announced in Budget 2024.
According to the accountancy body farming is the biggest industry in Northern Ireland with around “77% of the total NI land area of 1.35 million hectares used for agriculture”.
It also highlighted that figures show that in June 2024 there were over 26,000 farming businesses in Northern Ireland supporting over 51,000 jobs.
Inheritance tax
Last October ahead of the Autumn Budget, the chair of the Chartered Accountants Ireland’s Northern Ireland tax committee, Janette Burns, wrote to the exchequer secretary to the UK Treasury to highlight the committee’s tax administration and policy recommendations and concerns.
Burns had cautioned against reducing or restricting the scope of APR and/or BPR and highlighted that the impact of any restriction would be particularly damaging for family-owned businesses and the farming sector.
The UK Chancellor confirmed last October that from April 2026, 100% relief for APR and BPR will be limited to the first £1 million of combined agricultural and business property with any value above this receiving relief at 50%, effectively resulting in an IHT liability of 20%.
Cróna Clohisey, director of members and advocacy at Chartered Accountants Ireland today confirmed that the organisation has again written to the UK government to express its concerns about the proposed restrictions to agricultural property relief and business property relief due to take effect from April 2026.
“These proposals, which could result in significant tax liabilities, are already causing deep problems and distress for family businesses and farms across the UK, but we are concerned about the particular impact for family-owned business and farms in Northern Ireland.
“These changes will starve businesses and the economy of much-needed investment and could cause forced, premature business sales and the loss of jobs, lives and livelihoods. In the current uncertain geopolitical environment, the government needs to do whatever it can to protect genuine business and farming activity in the UK,” Clohisey said.
She also said the organisation has urged the UK government to “postpone the changes and engage with stakeholders to reframe this policy change in a way that it is more effectively targeted”.
