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Since 6 April 2026, Shropshire’s farming families have been living with a rule change that generated plenty of noise before it landed, and considerably less attention since. Agricultural and Business Property Relief, once worth 100% on qualifying farmland and business assets regardless of value, is now capped at £2.5 million per person, with 50% relief, an effective 20% inheritance tax rate, on anything above it. Six months in, it’s worth setting out plainly what that actually means for farms across the county, rather than relying on the headlines from when it was first announced.
For many smaller farms, the impact may be limited
The £2.5 million cap applies per person and is transferable between spouses, so a couple can shelter up to £5 million in qualifying agricultural and business assets between them, on top of their ordinary £325,000 nil-rate bands each (plus up to £175,000 each where a home passes to children or grandchildren). A lot of working farms, once land, machinery, buildings and stock are valued together, will sit comfortably under those combined thresholds.
Where it actually bites
The effect is sharper for the larger, land-rich farms common across Shropshire, where accumulated farmland value alone can run well past £2.5 million before a farmhouse, buildings or diversified business interests are even added. On a £4 million farm held by one person, roughly £300,000 could now be due, a bill that, without planning, often has to be met by selling land, machinery or part of the business itself, since farms are typically asset-rich and cash-poor.
Why gifting the farm early isn’t the simple fix it looks like
The instinctive response, gift the farm to the next generation now, isn’t as straightforward as it sounds. Gifts only fall outside the estate if the person giving them survives seven years, and an anti-forestalling rule can reach gifts made as far back as 30 October 2024. Continuing to live in the farmhouse or draw an income from land that’s been gifted away can also trigger reservation of benefit rules, which pull the asset straight back into the estate regardless of the gift having been made.
There’s also a change that often gets missed in these conversations: pensions, long treated as sitting outside the estate, will themselves count towards it from April 2027. For a farming family already close to the £2.5 million cap, that can tip a previously comfortable position over it without anything changing on the farm itself.
What’s worth doing now
None of this is a reason to panic, most farms will still owe nothing. But it is a reason to get the actual numbers done rather than rely on figures that circulated in 2024 and 2025, several of which, including the original £1 million cap, were revised upward before the rules took effect. The combination of farmland value, pension provision and the wider estate is specific to each family, and working out where a farm genuinely sits against the £2.5 million threshold, and what planning options are realistically available, is exactly the kind of conversation worth having with a financial adviser in Shrewsbury who understands both the rules and the realities of running a farm in the county.