Tricky new territory for managers of family farms to negotiate

Partner Andrew Linehan, explains there’s still a place for a boutique offering from independent firms in Sunday’s The Scotsman. Read the full article below, republished by kind permission of The Scotsman.

Andrew Linehan on agricultural taxation and land management policy

The date 6 April 2026 will mark one of the most significant shifts in agricultural taxation and land management policy for a generation. For Scotland’s farmers and landowners, the changes taking effect today will alter long-established inheritance tax protections and introduce new pressures on business planning, farm investment, and family succession structures.

From April 2026, the long-standing system of 100 per cent Agricultural Property Relief (APR) and Business Property Relief (BPR) – which has enabled farms and estates to pass between generations without punitive tax charges – undergoes a fundamental overhaul. Full 100 per cent relief will be capped at £2.5 million per person, with any value above that receiving relief only at 50 per cent. While spouses and civil partners will be able to transfer unused allowance on death, many farming businesses will still find themselves brought into charge for the first time in decades.

For modern farming enterprises, this cap is not academic. Rising land values, expensive machinery, substantial livestock holdings and diversified business structures mean many family farms will exceed the new threshold by a significant margin. The result is that value now becomes a liability – a reversal of the position that has underpinned growth, consolidation, and efficient land use since the mid-1990s.

The impact extends far beyond inheritance tax alone. Farmers will face new questions when planning capital investment. Decisions such as upgrading machinery, expanding operations or purchasing additional land will now be weighed against the risk of inflating the taxable value of the business. Many families are already reassessing structures that have worked effectively for years, including partnerships, companies, and tenancies.

The changes also fall unevenly across the sector. Privately owned family farms – those most embedded in Scotland’s rural communities – will feel the burden most acutely. By contrast, foreign landowners tied to their own domiciles, charities and publicly listed companies will remain largely unaffected. This imbalance raises important questions of fairness at a time when family farming is already navigating economic uncertainty and increased regulatory scrutiny.

Since the reforms were first announced, the rural sector has seen a marked slowdown in land sales but a surge in restructuring, with businesses seeking clarity before the new regime takes effect. The demand for accurate valuations of land, buildings, crops, stock and machinery will grow significantly as families look to ensure their affairs are in order before any gifting or succession event.

Alongside the tax reforms, landowners must continue to track ongoing legislative developments, including the Land Reform (Scotland) Bill, which is expected to

influence estate management and market activity over time. Its effects will be more gradual, but the cumulative burden of regulatory change remains a defining feature of the current landscape.

The message for farmers and landowners is clear: preparation is essential. Reviewing ownership structures, assessing exposure, and putting in place succession arrangements as we move past April 2026 will be critical to protecting family assets and ensuring long-term sustainability.

As President of SAAVA, I have seen first-hand how these changes are already reshaping professional workloads and business decisions. With timely planning and pragmatic advice, there remains a significant opportunity for farming families to adapt and secure the future of their businesses.

Andrew Linehan is a Partner, Murray Beith Murray LLP, and President of the Scottish Agricultural Arbiters and Valuers Association (SAAVA)

Specialist Rural Property Lawyers, Edinburgh

Andrew Linehan is a Partner with Murray Beith Murray LLP and heads our Rural Property team. If this article has raised any questions, or you would like to speak to one of our specialist rural property solicitors, then please call 0131 225 1200.

The firm was established in 1849, as advisors for generations of clients, committed to our values of integrity, expertise and trust. This aim and these values continue to this day as does our commitment to be here when you need us.