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UK Government Announces Extension of Agricultural Property Relief

In what the government claim to be a significant move to bolster the agricultural sector and environmental conservation, the Chancellor has announced an expansion of the Agricultural Property Relief (APR) as part of the Spring Budget 2024.

Environment Minister Rebecca Pow. Photo credit: UK Gov

This extension will now encompass all environmental land management schemes, including the Sustainable Farming Incentive, Countryside Stewardship, Landscape Recovery, and the England Woodland Creation Offer, among others, effective from 6 April 2025.

This policy adjustment is set to benefit farmers and landowners across the UK by making them eligible for APR, thereby exempting them from relevant inheritance tax on lands managed under environmental agreements.

The decision aims to remove obstacles for tenant farmers and landlords, encouraging collaboration to participate in these schemes without the fear of affecting their land's eligibility for APR.

Key features of the new policy include the availability of extended relief for lifetime transfers and transfers at death from 6 April 2025, and the applicability of relief to land managed under environmental agreements from 6 March 2024 onwards. Importantly, the relief will continue even after an agreement concludes, provided the land is managed in a manner consistent with the agreement.

This policy change is part of the government's broader reform of agricultural policy and spending in England, marking what they claim to be the most significant overhaul in decades.

The aim is to foster a resilient and productive agricultural sector that can simultaneously achieve ambitious environmental and climate targets. Environmental Land Management and woodland creation schemes are central to this vision, compensating farmers and land managers for delivering crucial outcomes for the climate and environment alongside food production.

Environment Minister Rebecca Pow underscored the government's commitment to supporting farmers and landowners participating in these schemes.

She highlighted the benefits of being part of the environmental land management schemes, including eligibility for APR and exemption from Inheritance Tax.

Pow also encouraged farmers to reconsider long-term investment decisions, such as tree planting, in light of this announcement, reinforcing the government's dedication to improving and conserving the natural environment alongside food production.


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