The High Court will hear a legal challenge to the Government’s reforms to inheritance tax reliefs for family farms and businesses on 17 and 18 March 2026. The case could affect how estates containing agricultural land or business assets are valued and taxed from April 2026 onwards.
The judicial review will examine whether the Government’s changes to Agricultural Property Relief and Business Property Relief were lawfully introduced. A Divisional Court, meaning a panel of judges rather than a single judge, will hear the case at the Royal Courts of Justice.
The dispute dates back to the October 2024 Budget, when Chancellor Rachel Reeves announced that family farms and businesses would no longer be fully exempt from inheritance tax. Assets above £1 million were originally to face a 20% tax rate on death.
Following widespread protests, including tractor convoys through central London, the Government raised the tax-free threshold. It now stands at £2.5 million for individuals and £5 million for married couples. Despite this concession, campaigners say the changes still threaten farming families and small businesses.
Law firm Collyer Bristow is bringing the case on behalf of affected farmers and business owners. James Austen, a partner at the firm, said the decision to escalate to a Divisional Court “underscores its importance” and the urgency of the matter.
Fiona Graham, Chief Operating Officer at Family Business UK, described the Government’s recent Spring Statement as a “missed opportunity” to reverse the tax. She said the reforms will “further reduce employment and lead to a fiscal loss to the Treasury.”
The Office for Budget Responsibility estimates the policy will actually reduce inheritance tax receipts by £100 million a year, as people change their behaviour to avoid the charge.
For anyone currently administering an estate that includes farmland or a family business, the situation creates real uncertainty. The new rules are due to take effect in April 2026, but the court’s decision could alter how those assets are taxed. Executors dealing with such estates may need to wait for the outcome before they can be confident about the final tax position.
The Government has so far maintained its position. The Chancellor defended the policy at the Spring Statement in March 2026, keeping the revised thresholds in place.
A ruling is expected to follow shortly after the hearing. It will determine whether the reforms can proceed as planned or must be reconsidered. Further background on inheritance tax reliefs is available on the GOV.UK website.