Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what definition of family farm was used when developing changes to inheritance tax relief for (a) business and (b) agricultural assets.

The Government believes its reforms to agricultural property relief and business property relief from 6 April 2026 get the balance right between supporting farms and fixing the public finances in a fair way. The reforms reduce the inheritance tax advantages available to owners of agricultural and business assets, but still mean those assets will be taxed at a much lower effective rate than most other assets. Despite a tough fiscal context, the Government will maintain very significant levels of relief from inheritance tax beyond what is available to others and compared to the position before 1992.

The Government’s assessment relates to claims for agricultural property relief and business property relief. The qualifying conditions for these reliefs are set out in Part 5 of the Inheritance Tax Act 1984.

Guidance on agricultural property relief is available at www.gov.uk/guidance/agricultural-relief-on-inheritance-tax and www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm24000.

Guidance on business property relief is available at www.gov.uk/business-relief-inheritance-tax and www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm25000.