HM Treasury forecasts that up to 185 estates claiming agricultural property relief will pay more Inheritance Tax in 2026 to 2027 as a result of the reform, out of up to 1,100 estates affected in total across all reliefs (gov.uk, 23 December 2025, subject to change).
That figure is far smaller than many early headlines suggested, and it moved after the government raised the tax-free allowance for qualifying agricultural and business property. This piece sets out the numbers that can be verified against official sources, shows how the forecast changed over time, and adds some measured analysis of what the data does and does not tell us. Figures are current as at July 2026 and are subject to change. It is general information, not advice, and Inheritance Tax rules apply across the whole of the UK.
How many farms are affected by the APR reform?
Up to 185 estates claiming agricultural property relief (including those also claiming business property relief) are forecast to pay more Inheritance Tax in 2026 to 2027, within a total of up to 1,100 estates affected across all the reliefs, and up to 220 estates claiming business property relief only (gov.uk, 23 December 2025, subject to change). On the same basis, around 85% of estates claiming agricultural property relief are forecast to pay no additional Inheritance Tax as a result of the changes (gov.uk, 23 December 2025, subject to change).
These counts are estates, not farms or farmers, and one estate can hold more than one property. The word "farm" does not appear in the tax statistics, so any headline about a number of farms is an interpretation of estate-level data rather than a direct count.
Key figures at a glance
The table below gathers the statistics most often cited in the debate, each with its named official source and reference period. Where a number carries a date, that is the reference period of the underlying data, not the date it was quoted.
| Statistic | Figure | Source & reference period |
|---|---|---|
| Estates claiming APR forecast to pay more IHT | Up to 185 | gov.uk, 2026-27 forecast, 23 Dec 2025 |
| All estates forecast to pay more IHT (all reliefs) | Up to 1,100 | gov.uk, 2026-27 forecast, 23 Dec 2025 |
| Estates claiming business property relief only, affected | Up to 220 | gov.uk, 2026-27 forecast, 23 Dec 2025 |
| APR estates forecast to pay no additional IHT | Around 85% | gov.uk, 2026-27 forecast, 23 Dec 2025 |
| Estates affected under the original £1m plan (all reliefs) | Around 2,000 per year | gov.uk, 2026-27 forecast, updated 21 Jul 2025 |
| Share of all UK estates that this represents | 0.3% | gov.uk, 2026-27 forecast, updated 21 Jul 2025 |
| Estates that claimed APR below £1m of qualifying property | 73% | gov.uk, 2021-22 data, updated 21 Jul 2025 |
| Median qualifying asset value on APR claims | £486,000 | gov.uk, 2021-22 data, updated 21 Jul 2025 |
| Cost of agricultural property relief to the Exchequer | £550 million | HMRC, 2021-22, published Dec 2024 |
All figures above are forecasts or administrative data as at the dates shown and are subject to change. Estate counts describe estates, not individual farms or people.
What is changing, and when
From 6 April 2026, full (100%) agricultural and business property relief applies to the first £2.5 million of combined qualifying property, with relief of 50% on value above that level, so the balance is taxed at an effective 20% rather than the standard 40% (gov.uk, 23 December 2025, subject to change). The government describes this as allowing a couple to pass on up to £5 million of qualifying agricultural or business assets between them, on top of the ordinary nil-rate bands.
The £2.5 million figure is higher than the £1 million allowance first announced at the Autumn Budget on 30 October 2024, which had also set 100% relief on the first £1 million and 50% above it from 6 April 2026 (gov.uk, published 30 October 2024, subject to change). The standard Inheritance Tax rate remains 40%, charged only above the available tax-free thresholds, and the nil-rate band of £325,000 and residence nil-rate band of up to £175,000 are unchanged and frozen to the end of the 2030-31 tax year (5 April 2031) (gov.uk, as at July 2026, subject to change). For the wider picture of how these bands work, our Inheritance Tax Explained guide sets out the mechanics.
How the forecast changed over time
The headline count of affected estates roughly halved once the allowance rose. Under the original £1 million plan, HM Treasury expected around 2,000 estates a year to pay more Inheritance Tax from 2026 to 2027; after the allowance was set at £2.5 million, the total forecast fell to up to 1,100 (gov.uk, 23 December 2025, subject to change). For agricultural property relief specifically, the estate count fell from 375 to 185.
| Forecast basis | All estates affected / year | APR estates affected | Source |
|---|---|---|---|
| Original £1m allowance (Autumn Budget 2024) | Around 2,000 | 375 | gov.uk, updated 21 Jul 2025 |
| Revised £2.5m allowance (announced Dec 2025) | Up to 1,100 | Up to 185 | gov.uk, 23 Dec 2025 |
Both rows are 2026-27 forecasts and are subject to change. The government stated that the higher allowance "halves" the number of affected agricultural property relief claimants, from 375 to 185 (gov.uk, 23 December 2025). One earlier gov.uk publication also cited up to about 520 estates claiming agricultural property relief on a slightly wider measure (gov.uk, updated 21 Jul 2025), which is one reason the counts quoted in public differ.
What the numbers mean
Read carefully, the official data points in two directions at once. On one hand, the affected group is small in national terms: the original estimate of around 2,000 estates a year represented about 0.3% of all UK estates (gov.uk, updated 21 July 2025, subject to change), and most agricultural claims sit well below the new allowance, with 73% claiming under £1 million of qualifying property and a median qualifying asset value of £486,000 in 2021-22 (gov.uk, 2021-22 data, updated 21 July 2025).
On the other hand, a small number of large estates account for much of the relief. Government analysis of 2021-22 data indicated that a large share of the value of agricultural property relief was concentrated in the biggest claims, which is part of the stated rationale for capping full relief (gov.uk, 2021-22 data, updated 21 July 2025). In our view, the tension in the public debate comes from measuring different things: the government counts affected estates in a single year, while farming bodies often count farm businesses that could be exposed over time. Both can be accurate while producing very different headlines.
An estate count and a farm-business count are not the same measure. A modest annual estate figure can still sit alongside genuine concern about how a working farm passes between generations.
A further point of caution: these are forecasts based on 2021-22 claims data extrapolated forward, and land values, asset ownership and behaviour can all shift before and after the rules take effect. The direction of the reform is set, but the precise number of estates that end up paying more will only be known once returns for later years are collected. Because the figures and the rules can change, it can be worth discussing a specific holding with a qualified professional rather than relying on a national average.
Where the figures are contested
Different bodies have published different counts, and the gap is largely about definitions rather than arithmetic. The government's estate counts are drawn from Inheritance Tax returns and describe estates that pay more tax in a single year (gov.uk, 23 December 2025). Farming and landowner organisations, reported widely in the farming press, have argued that many more farm businesses could be exposed over a longer horizon because a working farm's land and machinery can exceed the allowance even where annual profits are modest. Those wider figures are secondary estimates from interested bodies rather than official statistics, and readers may wish to weigh them accordingly.
Where a claim of this kind matters to a specific family, the reliable step is to value the actual holding and test it against the current rules, rather than adopt either side's national headline. Estate structure, ownership and timing all affect the outcome, which is one reason this sits within a wider plan set out in our estate planning guide.
Sources and methodology
Every statistic on this page is drawn from a named official source and verified against the live page. Estate counts are HM Treasury and HMRC forecasts for the 2026 to 2027 tax year unless stated otherwise; historical claim figures are HMRC administrative data for 2021-22, the most recent complete year published at the time of writing.
- gov.uk, "Inheritance tax reliefs threshold to rise to £2.5m for farmers and businesses" (23 December 2025): the £2.5 million allowance, £5 million per couple, and revised counts of 1,100 total, 185 APR estates, 220 BPR-only estates and around 85% of APR estates unaffected, for 2026-27.
- gov.uk, "Agricultural property relief and business property relief reforms" (updated 21 July 2025): around 2,000 estates a year, 0.3% of all UK estates, 73% of APR claims below £1m and a £486,000 median qualifying asset value, based on 2021-22 data.
- gov.uk, "Summary of reforms to agricultural property relief and business property relief" (published 30 October 2024): the original £1 million allowance and the 100% / 50% relief structure from 6 April 2026.
- HMRC, "Non-structural tax relief statistics" (December 2024): the £550 million cost of agricultural property relief in 2021-22.
- gov.uk, "Inheritance Tax" (as at July 2026): the 40% standard rate, the £325,000 nil-rate band and the up-to-£175,000 residence nil-rate band, frozen to the end of the 2030-31 tax year (5 April 2031).
Frequently asked questions
How many farms will pay more Inheritance Tax under the reform?
Official figures count estates, not farms. HM Treasury forecasts up to 185 estates claiming agricultural property relief will pay more Inheritance Tax in 2026 to 2027, within up to 1,100 estates affected across all reliefs (gov.uk, 23 December 2025, subject to change). A single estate can hold more than one property, so this is not a direct count of farms.
What is the new agricultural property relief allowance?
From 6 April 2026, full relief applies to the first £2.5 million of combined qualifying agricultural and business property, with 50% relief above that, which the government says lets a couple pass on up to £5 million of qualifying assets between them, on top of the ordinary nil-rate bands (gov.uk, 23 December 2025, subject to change). This is higher than the £1 million first announced in 2024 Source: gov.uk, as at July 2026, subject to change.
Why did the estimate of affected farms fall?
The forecast fell because the allowance rose. Under the original £1 million plan, around 2,000 estates a year were expected to be affected across all reliefs (gov.uk, updated 21 July 2025, subject to change). After the allowance was set at £2.5 million, the total forecast fell to up to 1,100, and the agricultural property relief count fell from 375 to 185 (gov.uk, 23 December 2025, subject to change).
Does the reform apply across the whole of the UK?
Inheritance Tax, including agricultural and business property relief, applies across England, Wales, Scotland and Northern Ireland on the same basis (gov.uk, as at July 2026, subject to change). Succession law that governs how property passes differs in Scotland and, to a lesser extent, Northern Ireland, so the tax rules can interact with different inheritance rules depending on where the estate is administered.
Are these figures final?
No. They are forecasts based mainly on 2021-22 claims data projected forward, and the government describes them as subject to change (gov.uk, 23 December 2025). Land values and ownership can shift, so the number of estates that actually pay more will only be confirmed once returns for later years are collected. Because outcomes vary, it can be worth discussing a specific holding with a qualified professional.
How can farming families plan for the change?
There is no single answer, because outcomes depend on how land and business assets are owned, valued and passed on. Many families choose to review ownership, wills and the use of available reliefs and nil-rate bands together (gov.uk, as at July 2026, subject to change). Given the sums involved, one option some consider is taking advice from a solicitor, a STEP practitioner or an accountant before making changes.