farmers are challenging the inheritance tax reforms in the high court due to lack of negotiation
Farmers and businessmen have presented a challenge to the High Court to oppose the changes in the inheritance tax regime, saying that the ministers are acting against the law by failing to properly consult on changes that can improve the future of family-owned companies.
The two-day judicial review, which began on 17 March in the Courts of Justice, will examine whether Chancellor Rachel Reeves breached the terms of consultation set out in the changes to Agricultural Property Relief (APR) and Business Property Relief (BPR).
The case was brought by Cambridgeshire farmer Tom Martin, his father George Martin and the campaign group Farmers and Businesses for Fair Tax Relief. The claim is being supported by law firm Collyer Bristow on behalf of consultancy firm Alvarez & Marsal.
At the heart of the legal dispute is the government’s Tax Consultation Framework, introduced in 2011, which obliges ministers to hold at least one formal public consultation on major tax changes. The plaintiffs argue that the inheritance tax changes, which affect how farms and businesses are passed down from generation to generation, clearly meet that threshold but were introduced without meaningful consultation.
Speaking before the trial, Tom Martin said he was forced to leave his farm work to pursue legal action, describing the case as a fight for fairness. Outside the court, campaigners gathered under placards reading “Keep Farms and Firms in the Family”, highlighting the growing unrest in rural and business communities.
Under the proposed changes, which are due to come into effect from April 2026, the inheritance tax relief will be structured as follows:
• 100% relief on the first £2.5 million of eligible agricultural and business assets
• 50% exemption on assets above that limit
• Relief of up to £5 million for married or civil partners, as well as general allowances
• Any tax debts paid over 10 years, without interest
Although the government has pitched the changes as a more equitable approach to taxation, critics say they could alter the succession planning of family-owned farms and companies.
Plaintiffs’ lawyers say the lack of consultation has created a lot of uncertainty.
Alexander Marcham, managing director at Alvarez & Marsal Tax, said many of the affected businesses have been built over generations and now face difficult decisions without clarity. He warned that these changes could disrupt long-term planning around succession, investment and ownership structures.
The plaintiffs argued that the failure to consult denied them a voice in the development of the policy, especially given the magnitude of the financial and operational consequences.
The government opposes the case, maintaining that legal intervention would risk moving to parliamentary jurisdiction. However, the plaintiffs argue that the decision not to negotiate happened before the law reached Parliament, making it easier to challenge the law.
A decision is not expected immediately. Judgment will likely be reserved and delivered in writing within the next few months.
Beyond the immediate tax implications, the case may set an important precedent for how macro-financial policy is developed in the UK. If the court rules in favor of the plaintiffs, it could strengthen the requirement for formal consultation on important tax changes, which could reshape the way future budgets and policy changes are introduced.
However, for now, farming families and business owners remain in a state of uncertainty, awaiting a decision that could have lasting effects on the wealth produced, the rural economy and the scope of the business environment.
