Farm Inheritance Tax ‘Illegal’, High Court Hears

A legal challenge to the UK Government’s proposed inheritance tax changes affecting farms has begun in the High Court, with claimants arguing that ministers acted unlawfully in the way the reforms were introduced.

The case centres on planned changes to Agricultural Property Relief (APR) and Business Property Relief (BPR), which currently help protect family farms and businesses from large inheritance tax bills when assets are passed down between generations. The judicial review is being heard over two days at the Royal Courts of Justice in London.

The legal challenge has been brought by Cambridgeshire farmers Thomas Martin and George Martin, supported by the campaign group Farmers and Businesses for Fair Tax Relief, alongside professional services firm Alvarez & Marsal.

Consultation at the heart of dispute

Claimants argue that the Government failed to follow its own established procedures when introducing the reforms. Specifically, they say ministers did not carry out a full consultation with affected taxpayers before proposing changes that could have major consequences for farming families and rural businesses.

According to the claimants, only a limited technical consultation was carried out, covering narrow aspects of the proposed reforms rather than their wider economic impact. They argue this approach breached the Government’s 2011 Tax Consultation Framework, which sets out how tax policy changes should be developed.

The judicial review will consider whether the Government’s consultation process complied with its public law obligations and whether the reforms were introduced lawfully.

Case heard by senior judges

Reflecting the significance of the issues involved, the case is being heard by a Divisional Court made up of senior judges rather than a single judge, which is more typical for judicial review proceedings.

Divisional Courts are generally convened only in cases of major public importance or where a ruling could establish a new legal precedent.

Potential implications for farm policy

The outcome of the case could have important implications for the future of inheritance tax policy affecting agriculture.

If the challenge succeeds, the Government could be required to delay the reforms and undertake a more comprehensive consultation with farmers and rural businesses before proceeding.

The dispute comes amid wider tensions between the farming sector and government over inheritance tax proposals, which have sparked protests and sustained lobbying from industry groups concerned about the long-term impact on family farms and investment in UK agriculture.

The High Court’s ruling is expected after the conclusion of the two-day hearing.