Planning Ahead:
Why Now is the Time for Professional Valuations in IHT Planning
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For many Welsh farming families, passing the baton to the next generation is as much about legacy and land as it is about tax-planning. With farm businesses often asset-rich but cash-poor, one misstep in valuation or relief eligibility can create family issues, unintended tax liabilities or even forced sales. At the heart of this is professional valuation for inheritance tax (IHT) purposes and right now, that matters more than ever.
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Valuation has always underpinned the eligibility for reliefs such as Agricultural Property Relief and Business Property Relief (BPR) which historically have enabled qualifying agricultural property to attract 100 % relief from IHT when certain conditions were met. But sweeping reforms, due to be implemented from 6 April 2026, will see significant changes to the available reliefs that have provided a comfort blanket to many agricultural businesses over the years.
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That change is profound for Welsh farms, many of which have diversified holdings, environmental agreements, renewables leases, woodland or development potential. What was once treated as agricultural value might now fall into a revised landscape of valuation and tax exposure.
The proposed changes now further reinforce the imperative need to plan ahead and prepare for the changes constructively. A robust, professional valuation today:
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Establishes the defensible figure and evidence base before any succession event;
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Allows review of how diversification, environmental land management agreements, tenancies and potential development affect value;
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Enables alignment between solicitor, accountant and valuer so relief eligibility and potential liability can be assessed.
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Provides some time for potential structured gifting, partnership restructuring or lifetime planning before the relief regime tightens.
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Waiting until the trigger event (death, transfer, restructure) invites risk: Farming families may not have fully appreciated the overall value of the property as a whole or within its component parts and as such may not have allowed themselves the time to compile a structured plan to deal with the tax applicable, leading to forced decisions rather than planned strategies.
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In Welsh farming, where inter-generational continuity matters, ensuring the next generation is not burdened by unexpected tax is paramount. The proposed changes are inevitably going to add pressures to faming families, however those who prepare and plan ahead will at least harvest a certain degree of peace of mind in that they can then formulate strategies for what lies ahead – in summary preparation gives you options, whereas panic takes them away. A sound valuation report as part of the early preparation process is therefore paramount.
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For more information contact:
Kathryn Williams – 07971 583 638