Proposed changes to UK inheritance tax

The last time farmers from across all sectors in Northern Ireland (NI) descended on Balmoral Park was back in November 2024 when an estimated 6,500 turned up at an Ulster Farmers’ Union (UFU) rally to voice their opposition to proposed changes to UK inheritance law.

Those changes were announced by British Labour party chancellor Rachel Reeves in her autumn budget at the end of October 2025 and include bringing an end to the ability of farmers to claim full agricultural property relief from inheritance tax when passing on land. The reforms are due to come into force from 6 April 2026 and propose a £1m (€1.16m) threshold on combined agricultural and business property relief. Beyond that, a 50% relief from inheritance tax applies. It effectively means that families passing on the farm after death face a 20% tax on assets over and above this £1m threshold and after other normal personal exemptions are applied.

Campaign

UK farming organisations have mounted a vociferous campaign against the proposed reforms, arguing that they threaten the future of ordinary family farms, given most farmers are asset rich (mainly due to the value of land), but cash poor.

With NI having some of the highest agricultural land values anywhere in Britain or Ireland, analysis produced by the Department of Agriculture, Environment and Rural Affairs (DAERA) suggests that at least half of all NI farms will be potentially impacted.

To date, there is little sign that the Labour party intends backing down on its inheritance tax proposals.

Evolving picture for NI farm support

Post-Brexit, while NI does have to follow various EU rules for goods, which allow companies to trade freely into the single market, it is no longer part of the CAP.

Up to 2024, NI farmers still received basic payment scheme (BPS) payments, although in 2025 this is being replaced by a new Farm Sustainability Transition Payment (FSTP), before the full roll-out of a new area based Farm Sustainability Payment (FSP) from 2026 onwards.

The FSTP comes with virtually the same rules as the BPS, including the same system of payment entitlements.

In 2026, some new rules will be attached to the FSP, including that all land will be eligible to be used to draw down payments, outside of hard features such as buildings and stone lanes. In addition, farmers must have actively farmed in 2020 or 2021 to be eligible for the new payment. It is expected that over 2,000 landowners will have little option but to sell their payment entitlements early next year.

Redirected

While area based payments are being retained, the total payment pot of approximately £293m (€345m) has been partially redirected into other schemes. In 2024, 9% was taken off all payments, mainly to fund the first year of a new Beef Carbon Reduction (BCR) scheme, which encourages farmers to slaughter cattle at younger ages. The scheme started out at a maximum slaughter age of 30 months, which has dropped to 28 months this year.

The second initiative is targeted at suckler cows and encourages farmers to lower the age at first calving of heifers and keep tighter control on calving interval of mature cows.

The aim of both schemes is to lower overall greenhouse gas emissions from the NI beef industry. To fund this suckler measure a further 6.5% deduction was applied to all farm payments in 2025.

Lost-out

With money being redirected at beef, it means other sectors have lost out, particularly those farmers who do not keep any cattle. Compared to what they received in 2023, their 2025 farm support payment is down by 15.5%.

Longer term, the intention within DAERA is to redirect funding towards a new agri-environment scheme known as Farming with Nature.

The extent to which that happens depends on the level of appetite among NI farmers for agri-environment schemes as well as the desire among local political leaders to see public money utilised in this way.

However, there are risks from any policy that shifts support away from productive farmers.

More environmental pressure on NI farms

The environmental rules that directly impact farms in NI are set out in the Nutrients Action Programme (NAP).

A new NAP to cover the period from 2026 to 2029 is currently the subject of a public consultation released by DAERA.

While larger farms in NI are already required to utilise low emission slurry spreading equipment, the draft plan proposes that this will be rolled out to all farmers by 2030.

There are also proposals to ban the use of straight urea from 1 January 2026, to put in place new limits for chemical nitrogen fertiliser, implement a fertiliser database and proposed new rules around slurry exports.

However, perhaps the most taxing requirements will apply on around 3,100 more intensive farms with annual manure livestock nitrogen production of over 150kg/ha.

These farms face new phosphorus (P) limits, proposed at 10 kg/P/ha/year by 2027, reducing to a limit of 8 kg/P/ha/year by 2029.

A profitable year for livestock farming in NI

Since the start of the year, beef prices in NI are up by over 160p/kg (188c/kg) and when compared to this time last year, it is an increase of over 200p/kg (235c/kg), which means that the value of a 400kg steer has increased by over £800 (€940) in the last 12 months.

That unprecedented rise in the price of beef has fundamentally altered the profitability of suckler beef production in NI. Beef finishers also benefited, with cattle bought last autumn turning significant profit when slaughtered this spring, while dairy farmers have seen large increases in the value of dropped calves and cull cows.

In the dairy sector, current milk prices paid to NI farmers are around 5p/l (6c/l) ahead of the same month in 2024, so there hasn’t been the same percentage lift in price as seen in beef. However, NI dairy farmers are generally in a good place thanks to steady grain markets and a very favourable feed to milk price ratio.

Steady ration prices have also benefited the intensive sectors, with eggs in particular, delivering strong margins over the last 12 months.

However, margins in the tillage sector are tight and farmers will need favourable growing and harvest conditions if profits are to be made.

So far this spring, the weather has been kind, which has added to the general positivity around NI farming. In the past, only a few very progressive dairy farmers would have had their first-cut silage in the pit by the time the Balmoral Show arrived.

This year, it looks likely that first cut on dairy farms will be largely complete.

AFBI to showcase its science at Balmoral

The Agri-Food and Biosciences Institute (AFBI) stand at the Balmoral Show will include a model farm of the future, with researchers on hand to discuss sustainable farming practices across soil health, grassland, arable, livestock and slurry management.

Other key features include an opportunity on Wednesday to have a close-up look at insects, while Thursday will focus on grass breeding.

On Friday, researchers involved in fisheries will take centre stage and on Saturday scientists will have an exhibit on antimicrobial resistance.

The AFBI stand is located within the government exhibition in the Eikon shopping village.

M&S celebrates 25 years at the show

Supermarket retailer M&S will return to Balmoral Show this year for the 25th time, with its programme designed to showcase its commitment to farming in Northern Ireland.

The M&S stand includes a live chick enclosure where visitors can learn more about the retailer’s free-range egg supply, as well as demonstration kitchen where classically-trained chef, Adam Palmer will take centre stage.

M&S is a platinum sponsor of the 2025 Balmoral Show, alongside Tesco, Spar and ABP Food Group.