At the end of October 2024, new UK government announced reforms to the inheritance taxes which have not been taken well by farmers and landowners across the UK. But its possible that these new rules could hit yard owners too.
At the present time, landowners can claim for agricultural property relief (APR) on qualifying agricultural land and property, and business property relief (BPR) on qualifying interest or shares in a business without a limit or cap. However, as of 6 April 2026, the full 100% relief from inheritance tax (IHT) will be restricted to the first £1m of combined agricultural and business property. Above this amount, individuals will only be eligible for 50% relief from IHT.
The owners of many equestrian businesses – livery yards, riding schools, studs and equestrian centres- are based upon agricultural land, or run alongside farming activities and could also feel effects.
As stud activities fall under agricultural activities, such business are eligible for APR. In the event of death of a property owner, the beneficiaries could apply for APR to reduce their taxes on the inheritance. Considering the high value of equestrian buildings, facilities and land, and attached housing these values could easily exceed the now £1 million threshold.
Generally, livery yards and riding schools trading as businesses do not qualify for APR but some may qualify for BPR – so such businesses could also be affected by the changes.
Scrapping the Agricultural Property Relief would deal a devastating blow to family farms. With young farmers already struggling, a potential 20% inheritance tax could make it impossible to keep these farms in the family. This move risks stripping rural Britain of its lifeblood: the small, family-run farms that sustain our rural communities. DEFRA figures show that these changes will could affect up to two-thirds of farms.
This has already been covered extensively in the press and the plans have been heavily criticised by farming besides such as the NFU and Countryside Alliance.
“This is not just a bad policy, it is also bad politics. At one stroke Labour has undone all that work that it had done in opposition to heal its rift with the countryside. The family farm remains the backbone of rural communities and they are also central to the public vision of the British countryside.”
– Countryside Alliance Chief Executive Tim Bonner
Whilst the main focus has been on the affects these changes could have on farmers, other business owners could be facing challenges too.
It is important that owners consider their own personal situations, and take professional advice from their solicitor and tax advisor to confirm their situation.
