“The first public signal that the Chancellor knows her inheritance tax reforms have been a disaster,” said CLA president Gavin Lane, after the Treasury confirmed that any unused £1 million Agricultural and Business Property Relief allowance can now be transferred between spouses and civil partners. For farm families across Yorkshire, Cumbria, Lancashire and Northumberland, the Budget 2025 tweak is small but meaningful.

Practically, this means a surviving husband, wife or civil partner can claim 100% relief on up to £2 million of combined farm and business assets, depending on how the estate is made up. The government says the change also applies to widows and widowers even if the first death was many years before 6 April 2026.

The wider overhaul still begins on 6 April 2026. From that date, full 100% relief is capped at the first £1 million of qualifying Agricultural Property Relief (APR) and Business Property Relief (BPR) combined. Above the cap, relief falls to 50%-an effective inheritance tax rate of up to 20%-and bills can be paid over ten years interest‑free.

Ministers argue most estates won’t be hit. Treasury modelling suggests almost three‑quarters of APR/BPR claimants will not pay more under the reforms. In 2026–27, up to 375 of the wealthiest estates are expected to pay more than under the old rules; making the allowance transferable means 190 estates will be better off than first planned, with 60 paying no extra and 130 paying less.

The fairness case runs like this: the top 7% of claims account for 40% of APR by value-costing taxpayers £219 million-while the top 2% account for 22% (£119 million). Ministers say curbing the largest claims helps repair the public finances while protecting smaller family farms.

Here’s how it looks on a northern farm balance sheet. Two people can pass up to £3 million tax‑free to a child or grandchild by combining the standard nil‑rate and residence nil‑rate bands with the £1 million APR/BPR allowance each. Leave it to someone else and the total falls to £2.65 million. A sole owner can pass up to £1.5 million to a child without inheritance tax. Note the residence nil‑rate band tapers for estates worth over £2 million. Actual outcomes still depend on the mix of assets.

Farming leaders remain unconvinced. NFU president Tom Bradshaw has called the policy “morally wrong and economically flawed”, warning many medium‑sized family farms are asset‑rich but cash‑poor. The union’s alternative ‘clawback’ idea-taxing inherited agricultural assets only if they’re sold-was tabled earlier this year.

The Treasury rejected that compromise in February, pressing ahead with the April 2026 start date. That decision hardened industry opposition from the NFU, TFA and CLA, even as today’s transferability move softens the edges for bereaved families.

Planning matters now, not later. Northern families should refresh valuations, review wills so both partners can use their allowances, and check how ownership is structured-particularly where land sits in partnerships or companies. If a bill is due, remember the ten‑year, interest‑free instalment option. Speak to a qualified adviser before making changes.

Trusts are a live detail too. HMRC has outlined how a separate £1 million allowance will apply to relevant property trusts from April 2026, refreshing every ten years and applying on exits as well as anniversaries. Expect further clarification alongside the Finance Bill.

Confidence remains fragile in the farm economy. An industry survey with Family Business UK found many family firms paused or cancelled investment after the Autumn 2024 announcement; today’s concession may steady nerves, but most are still planning around April 2026.

Bottom line for the North: transferability will help widowed farmers avoid forced sales when one partner dies, yet the main shift-capping 100% relief at £1 million from 6 April 2026-still stands. The government’s guidance was updated on 26 November, so plan against the rules as they are today.