The risk of farmers doing ‘Diddly Squat’: why the new IHT rules make estate planning essential

Jeremy Clarkson has recently revealed in the latest episodes of Clarkson’s Farm that he has been diagnosed with prostate cancer.  There are very few of us who have not heard someone say those dreaded words to us, and I was pleased to hear Jeremy’s confidence that it has been caught early.

Jeremy’s diagnosis serves as a timely reminder of the importance of reviewing estate planning, and the risks of leaving it too long and to check:

• Is your Will up-to-date, or have you done ‘Diddly Squat’ (pardon the pun!) about it?
• Have you made Lasting Powers of Attorney (LPAs) and, if so, have you made the LPA for health and welfare, so someone can make decisions for you should you become incapable?
• If you have not made an LPA for finances, who is going to pay for farm supplies if your name is the only one on the account and you lose capacity? 
• For farmers in particular, have you reviewed your estate planning following the changes to the IHT treatment of farming assets which took effect from 6 April 2026? 

The changes for farmers were widely publicised across the press and particularly by Jeremy through his TV show Clarkson’s Farm.  His social media channels actively protested against the changes, as well as protesting through London.  The protests ran up and down the country and although there was a slight change by the Labour Government at the eleventh hour in increasing the proposed IHT allowance for farming assets from £1m to £2.5m, in the grand scheme of things, for farmers, this fell way short of the cap which was previously unlimited.  

Prior to April 2026, those with qualifying farming assets could leave those assets to their beneficiaries, either outright or through trust structures without there being an IHT charge.  This allowed successful succession of farms through many generations without the need to sell assets in order to fund IHT charges.  That is all changing, and the impact for farming families is significant.

From 6 April 2026, IHT applies to qualifying farming assets over the £2.5m allowance (or £5m, where a spouse has died and left their estate to their surviving spouse, who has then inherited their £2.5m allowance).  The IHT allowances for farming assets can be used in tandem with the Nil Rate Band allowance of £325,000 (which is again transferable to a surviving spouse, giving a total of £650,000).  It can also be used with the Residence Nil Rate Band (RNRB) subject to the estate not being over the £2million threshold before deducting any reliefs or exemptions (including the relief for farming assets).  For estates over £2m, the RNRB tapers away by £1 for every £2 by which the estate is over that £2million threshold.

The public debate around these changes has been amplified by programmes such as Clarkson’s Farm which has brought wider attention to the fact that many farms are asset-rich but cash-poor. Even with the increased £2.5 million allowance, larger farms may still face a crippling IHT liability, particularly where land values are high and profits are comparatively modest.  Yes, you can elect to pay the IHT over ten years, but for some farms this will swallow all of their profit.  This could see farmland needing to be sold, or leveraged, in order to pay the IHT.  It could also see more land being swallowed up for development, reducing the ability to support local food production.  

The IHT reforms represent one of the most significant changes for farming families for years. The introduction of a cap on the relief may expose many farms to problems with their succession planning in the future.  For farms with substantial land values and modest income, the reforms may affect whether the farming business can be passed intact to the next generation. The public debate, amplified by programmes such as Clarkson’s Farm reflects a genuine concern: agricultural wealth is often tied up in land, not available cash.

Early succession planning, careful asset review and properly structured wills are likely to be essential for farming families now that the regime has taken effect.  Trusts can be a useful mechanism to reduce a surviving spouse’s estate and help maximise the allowances available, but not all farmers would have considered them. 

So, as regular check-ups are recommended for health reasons, the same can be said for your estate planning – a regular check-up and catching a problem early can help you formulate a plan to fight against that problem.  By doing ‘Diddly Squat’ you risk the success of the next generation and may lose a window to maximise the IHT allowances available, particularly for couples on second death. 

For advice on succession planning for farming families, please contact Amy Lane at gunnercooke, HERE.