Changes announced in the budget could affect stud, riding school and livery yard owners – as people are reminded to take appropriate financial advice.
In the Government’s autumn budget on 30 October chancellor Rachel Reeves announced reforms to agricultural property relief (APR) and business property relief (BPR).
Currently, people can claim for agricultural property relief on qualifying agricultural land and property, and business property relief on qualifying interest or shares in a business without a limit or cap.
But from 6 April 2026, the full 100% relief from inheritance tax (IHT) will be restricted to the first £1m of combined agricultural and business property. Above this amount, individuals will only be eligible for 50% relief from IHT.
Concerns from farmers have been reported nationally, and protests have taken place in London. But it has been highlighted that equine stud owners who claim agricultural property relief could also be affected.
“Upon a farmer or stud owner’s death, their beneficiaries could apply for agricultural property relief – and potentially also business property relief – and there was no limit to how big that claim might be,” Nicola Glass, an independent financial adviser at Integrity365, told H&H.
“But now the Government has put a limit on this, and when it comes to studs, when you add up the land, buildings, farmhouses and anything else that could qualify, it could easily be more than £1m in value. This means that the beneficiary will have to pay 20% IHT on anything over this.”
Generally, livery yards and riding schools trading as businesses do not qualify for agricultural property relief but some may qualify for business property relief – so such businesses could also be affected by the changes. It is important that owners take professional advice from their solicitor and tax advisor to confirm their situation.
“Should business property relief be applicable to an estate or individual, as with the agricultural property relief, this will be capped at 50% for anything over £1m,” said Ms Glass.
“There’s lots of change from the budget that people haven’t quite picked up on yet. There’s been lots of discussions about farmers, which is important, but it affects a lot of other people as well.”
Ms Glass added that the message is “not to panic”.
“There are things that can be done, and the first step would be to value all your assets and speak to an adviser about what your potential tax liability could be,” she said.
“From there you can look at IHT planning, and options can include taking out insurance against the liability or considering gifting within your lifetime.”
A British Horse Society spokesperson told H&H it encourages anyone who owns a riding centre or livery yard to think about whether they could be affected by the changes to business property relief.
“Of course, the impact will vary largely depending on your individual situation or circumstances, so we would strongly urge you to seek clear legal advice and guidance,” she said.
Example: Anne Stables runs and is the sole owner of a profit-making stud farm.
Anne has full use of her IHT bands on her death, totalling £500,000. Her will gives everything to her three children equally, and her home is not deemed a “working farmhouse”, so does not qualify for relief.
Her home is worth £400,000 and she has £100,000 savings. Her APR/BPR qualifying land and assets are worth £1.3m
Previously, the stud farm would pass tax-free; only her home and savings would potentially be subject to IHT. As these are under £500,000, no IHT is due.
When the changes come into force, only £1m of the stud farm value would fall into the 0% tax charge; the additional £300,000 only qualifies for 50% relief. This would be taxed at 20%, totalling £60,000. Anne should seek professional advice to look at IHT tax mitigating solutions.
*Example only. Financial advice must be sought for each individual case.*
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