Inheritance Tax: Lessons from Clarkson's Farm

Love him or hate him, Jeremy Clarkson and his Amazon Prime show Clarkson’s Farm have certainly brought mainstream attention to farming and its community, the red tape of the planning system, and the challenges of diversification. His experiences, though unique, mirror those of many farmers today.

The challenges of diversification in farming

With local, global, and political issues all having a cumulative effect on farm profitability and viability, it is no wonder that many are turning to diversification projects or going to market because the current crop (pardon the pun) of owners cannot afford to keep them running.

The importance of buying local food and produce

In his unique style, Clarkson often highlights the importance of buying local food and produce from local businesses even if partner Lisa is scolded by “cheerful” Charlie for stocking items outside of the 16-mile zone imposed by West Oxfordshire District Council and their planning team. 

Whether it be beef from the cows, pork from the pigs, the ever-growing mushrooms from season 3, or Bee Juice (honey to you or me), all these items promote British produce. The show’s popularity extends the reach of the gems of the Cotswolds and the quality you would expect.

Without wanting to spoil the ending of season 3, where Jeremy challenges Kaleb in his new role as farm manager, they go head-to-head in a war of profits with diversification versus traditional farming. The journey along the way and the results make for an interesting watch. 

Succession planning and tax reliefs

However, when it comes to succession planning and Inheritance Tax (IHT), it is important for Jeremy and any farmer wanting to diversify to be aware of the available tax reliefs and their conditions, which can be weakened or lost when undertaking certain diversification projects. 

Biodiversity Net Gain and Agricultural Property Relief

There are various projects under the Environmental Land Management Scheme (ELMS) and those relating to Biodiversity Net Gain (BNG). The latter received long-awaited clarification in the 2024 Spring Budget, where it was confirmed that Agricultural Property Relief (APR) would apply and be extended to this from 6 April 2025. The loss of APR on such land could cause huge difficulties in the continuation of farms and the families that run them if they cannot rely on Business Property Relief (BPR) to relieve their situation.

Taking coherent and combined advice from your lawyer, accountant/tax specialist, and land agent means that having an up-to-date will can ensure the structure is in place to mitigate tax, apply for the relevant reliefs and further the future of your farm for generations to come.

For further information on succession planning and tax reliefs in farming, please get in touch. I can be contacted on 0330 818 3089 or via email at samuel.flower@birkettlong.co.uk