Post-Nuptial Agreements: A Vital Tool for Farmers Amidst Upcoming Inheritance Tax Changes

As the UK Government prepares to implement significant changes to inheritance tax (IHT) regulations, it is crucial for farmers and their families to consider the benefits of post-nuptial agreements. These agreements can play a pivotal role in estate planning, particularly in the context of transferring assets before death to mitigate tax liabilities.

Amy Fallows Senior Associate Solicitor & Head of our Family Law team provides an update.

The forthcoming changes to IHT, set to take effect in April 2026, will introduce new thresholds and rates that could impact the financial stability of farming families. Notably, the 100% rate of agricultural property and business relief will only be available for the first £1 million of combined assets. Beyond this threshold, families will receive relief at a reduced rate of 50%, effectively creating an IHT rate of 20%. This change underscores the importance of strategic estate planning to preserve family wealth and ensure the continuity of farming operations.

Post-nuptial agreements, which are legal contracts entered into after marriage, allow couples to outline the division of assets in the event of a divorce or separation. In the context of IHT, these agreements can also facilitate the transfer of assets between spouses, ensuring that both parties are adequately protected and that the estate is structured in a tax-efficient manner.

Amy Fallows, Solicitor and Head of Family Department at Cartmell Shepherd, emphasises the importance of post-nuptial agreements for farming families: “With the upcoming changes to inheritance tax, it is more important than ever for married couples to consider post-nuptial agreements. These agreements can help ensure that assets are transferred in a way that minimises tax liabilities and protects the family’s financial future.”

By transferring assets before death, married couples can take advantage of the spouse exemption, which allows assets to be passed between spouses free of IHT. This strategy can be particularly beneficial for farmers, whose estates often include valuable agricultural property and business assets. Properly structured post-nuptial agreements can help ensure that these assets are preserved for future generations, while also providing clarity and peace of mind for both parties.

For more information on post-nuptial agreements and inheritance tax planning, please contact Amy fallows on 01228 516666 or click here to send her an email.