Anticipating Tax Reforms: What Farmers and Family Businesses Need to Know

As the seasons change and we settle into winter, the aftermath of the Autumn Statement delivered on 30 October is still fresh in the minds of rural family businesses. While the chancellor set out broad financial plans, the finer details—particularly those concerning tax changes—are expected to be rolled out in Summer 2025.

For farmers and rural enterprises, this delay only prolongs the uncertainty surrounding potential reforms to capital taxes, such as inheritance tax and capital gains tax. These taxes hold significant importance for farming families, where reliefs for agricultural property (farmland and buildings) and business property (the trading aspects of a farm) are vital for preserving generational ownership and business continuity.

Over the years, discussions around reforming these reliefs have been a recurring theme, typically aimed at increasing government revenue. While no immediate changes have been announced, the anticipation of potential reforms can lead to anxiety and a sense of urgency to act. However, in these moments, it’s critical to resist hasty decisions.

Effective succession planning requires a calm, strategic approach that considers more than just taxes. Balancing tax efficiency with the family’s needs and the commercial realities of running a business is essential. For example, rushing to transfer assets now, without clarity on the future tax landscape, could inadvertently disrupt business operations or create unnecessary family conflicts.

As we await the more detailed rollout of changes in Summer 2025, it’s important for families and business owners to stay informed and seek professional advice. Thoughtful, measured planning can ensure that assets are passed on in a way that safeguards the business, supports family harmony, and prepares for any future legislative changes.

By taking a proactive yet considered approach, rural family businesses can position themselves to weather potential reforms while preserving their legacy for future generations.

If you would like tailored advice on succession planning or navigating potential tax changes, please contact Emma Elwess, Director at Ware & Kay incorporating Pearsons & Ward Solicitors on Malton 01653 692247, York 01904 716000 or Wetherby 01937 583210