Speculation is rife on what will be announced in the Budget due on 28 October as the Chancellor of the Exchequer, John Healy, will be delivering his first budget statement since taking up the role earlier in the year.

Budget 2026: what the TFA has asked the Chancellor to deliver

At the beginning of September, the TFA provided Mr Healy with a package of practical tax and welfare reforms designed to strengthen the tenanted agricultural sector. We focused on the need for the Government’s fiscal policies to encourage secure tenancies, productive investment and resilient family farms, while targeting genuine tax avoidance rather than penalising working businesses.

Inheritance Tax: protecting survivors of joint tenancies

Our first request concerns jointly held agricultural tenancies. When one joint tenant dies, the survivor will face a potential Inheritance Tax bill even though they have not received a saleable asset. We want survivorship under a joint agricultural tenancy to be exempt where the surviving tenant continues to occupy and farm the land.

Rewarding landlords who offer secure tenancies

We are also asking for 100% Agricultural Property Relief (APR) from Inheritance Tax for landlords letting land under the Agricultural Holdings Act 1986, or under a Farm Business Tenancy of at least ten years without scheduled break clauses. This would reward landlords who offer meaningful security and give tenants the confidence to invest in buildings, drainage, soil health, environmental delivery, succession, and business resilience. Conditional breaks for matters such as tenant breach or a genuine need to recover land for non-agricultural use should remain possible.

We recognise that some high-value horticultural and vegetable crops require short rotational lettings. We therefore propose an exception for land let for up to two years where it was not let during the previous 12 months.

Rebalancing Capital Gains Tax Rollover Relief

The TFA believes Capital Gains Tax Business Assets Rollover Relief can tempt wealthy investors to buy agricultural land, adding pressure to land prices. We have therefore asked Mr Healy to restrict that rollover relief for land purchases, except in compulsory purchase cases.  At the same time, landlords should be able to claim rollover relief when they invest capital gains in fixed equipment on tenanted farms. This fiscally neutral rebalancing would direct support towards improvements that increase productivity, profitability and resilience.

Tackling sham share farming and contract farming arrangements

We also need HMRC to scrutinise arrangements labelled as share farming, contract farming, share partnerships, or grazing licences where the landowner bears little commercial risk or exercises no genuine management control. Bona fide arrangements should be protected, but sham arrangements that effectively operate as tenancies should not gain tax advantages simply through their label.

Stamp Duty Land Tax: fairer treatment for tenants

Stamp Duty Land Tax (SDLT) on rent is calculated across the life of a tenancy, which penalises longer agreements. We want agricultural tenancies assessed as though they lasted two years, regardless of their actual term.

We also want replacement-main-residence relief extended to people leaving qualifying job-related accommodation. Tenant farmers who must leave a farmhouse at retirement or when a tenancy ends should not face the higher SDLT rate simply because they own another residential property which they are letting out.

Universal Credit: fixing the Minimum Income Floor

Turning to welfare reforms, The Minimum Income Floor for Universal Credit assumes that established self-employed claimants earn at least the National Minimum Wage for their reported working hours. For farmers working long hours for low returns, that assumption can remove legitimate access to Universal Credit.  We want the Minimum Income Floor applied only where there is deliberate misrepresentation or manipulation. Otherwise, entitlement should be based on taxable profits reported to HMRC.

Supporting tenant farmers and the wider rural economy

Together, these proposals would support longer and more resilient farm tenancies, unlock much needed investment and improve fairness. They would also focus tax rules on productive farming and genuine commercial risk. The TFA will continue pressing the Chancellor and the wider Government to ensure that policy recognises the needs of tenant farmers and the vital contribution they make to food security, rural growth and environmental delivery.

-Ends-

What Do We Need to Hear from the Chancellor of The Exchequer? was penned by George Dunn, TFA Chief Executive, on 21 October 2026.

Additional reading:

TFA Lobbying #16 – TFA Submits Proposals for 2026 October Budget

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