With the Autumn Budget due on 26 November 2025, speculation is mounting around how Chancellor Rachel Reeves will address the UK’s fiscal challenges. While she has pledged not to raise income tax, VAT, or employee National Insurance, there is growing talk of reforms that could directly affect farmers, landowners, and rural businesses.
The following highlights some of the main tax rumours relevant to farmers and landowners
Inheritance Tax (IHT) and Agricultural Property Relief (APR)
Significant reforms to Agricultural Property Relief and Business Property Relief are already in place, with April 2026 introducing the capped reliefs. While these changes are already confirmed, there is continued speculation that the Autumn Budget could go even further in tightening reliefs, for example, limiting how reliefs apply to assets held in trusts or by introducing new tax triggers linked to land use, such as environmental or biodiversity schemes. All of which would increase the inheritance tax challenges facing rural businesses.
Capital Gains Tax (CGT) on Land Sales – Updated October 2025
There is continued speculation that Capital Gains Tax (CGT) could rise further in future Budgets. As of October 2025, most assets — including land and property — are taxed at 18% for basic-rate taxpayers and 24% for higher-rate taxpayers. These rates were increased from 10% and 20% earlier in the year, bringing CGT closer to income tax levels.
Business Asset Disposal Relief (BADR), which previously allowed qualifying business or farmland sales to be taxed at just 10%, has also been revised. From 6 April 2025, gains qualifying for BADR are taxed at 14%, and this is scheduled to rise again to 18% from April 2026. The annual CGT exemption has been reduced to £3,000 for the 2025/26 tax year.
For farmers and landowners, these changes could significantly increase the tax cost of selling land for development, restructuring farm businesses, or transferring assets within the family. In practice, the timing of disposals and eligibility for reliefs will be critical to minimising tax exposure.
Land Tax
The government is reported to be looking closely at how land and property are taxed, with two key ideas in circulation. The first is the potential replacement of Stamp Duty Land Tax (SDLT) with a new national property sales tax. Unlike SDLT, which is paid on a sliding scale, this would likely be a flat percentage applied to property sales above a certain threshold — rumoured to be around £500,000. For the rural sector, where farmland and estate transactions often exceed this level, it could add a substantial extra cost to buying and selling land. The second is the possible introduction of new, higher council tax bands for valuable homes, which would particularly affect larger rural properties and estates.
VAT and Diversification
Rumoured adjustments to the VAT registration threshold could bring more small and medium-sized farm businesses into the VAT system. Many diversified enterprises, such as glamping, holiday lets, renewable energy projects, or farm shops, currently sit below the threshold and avoid VAT registration. Lowering that limit would not only increase costs but also add to administrative and compliance requirements. For many, this could affect the financial viability of diversification projects that have become a lifeline following changes to farm support payments.
Conclusion
While these tax changes remain largely speculative, they highlight the importance for farmers, landowners, and rural businesses to plan ahead. Careful forward planning can help mitigate potential tax burdens, protect family assets, and ensure continuity of business operations. Now is the time to review succession strategies, assess property and diversification plans, and consider the timing of disposals. Seeking professional advice from chartered surveyors, accountants, and tax specialists is essential to navigate these uncertainties, make informed decisions, and safeguard the future of rural enterprises.
It’s important to remember that all of the changes discussed here are currently rumoured and have not been confirmed. While some proposals may sound worrying, the intention is not to cause alarm but to emphasise the value of being proactive. By planning ahead and considering potential scenarios now, farmers and landowners can make informed decisions, reduce risk and stay prepared for whatever the Autumn Budget ultimately brings.
Olivia Hale, BSc (Hons) MRICS
Land Agent and Auctioneer
McCartneys LLP
Rural Professional Department | Hay-On-Wye
01497 820778 | 07984386871 mccartneys.co.uk