High Court to hear urgent challenge over farm inheritance tax reforms

A High Court battle over inheritance tax reforms that could reshape the future of family farms will be heard by a panel of senior judges later this month.

The judicial review challenge to the government’s proposed changes to agricultural property relief (APR) and business property relief (BPR) has been listed for an urgent two-day hearing at the Royal Courts of Justice on 17–18 March 2026.

In an unusual move, the case will be heard by a Divisional Court rather than a single judge. A panel of senior High Court and Court of Appeal judges will determine the outcome — a step typically reserved for cases of major public importance or constitutional significance.

APR and BPR currently allow qualifying farms and family businesses to pass down land and business assets with significant inheritance tax relief.

Critics argue that altering those rules without proper consultation could have serious consequences for farm succession planning and long-term viability.

The claim is being brought by Alvarez & Marsal LLP, Thomas Martin, George Martin and the campaign group Farmers and Businesses for Fair Tax Relief. They are represented by law firm Collyer Bristow LLP.

The challenge does not focus on the substance of the proposed reforms themselves. Instead, it centres on whether the government acted lawfully in the way it consulted — or failed to consult — before introducing draft legislation in the Finance Bill.

The claimants argue that ministers breached prior commitments to consult properly with affected taxpayers, undertaking only a limited technical exercise on narrow aspects of the proposals despite their far-reaching impact on farming families and rural businesses.

The Court has already granted permission for a ‘rolled-up’ hearing, meaning it will consider both whether the case can proceed and the full merits of the challenge at the same time.

James Austen, partner at Collyer Bristow with primary conduct of the claim, said the decision to convene a Divisional Court highlighted the gravity of the issues involved.

“The listing of this case before a Divisional Court underscores its importance, as does the urgency with which the Court will now hear it,” he said.

“The issues raised in this judicial review are profound: they concern the standards by which government should have consulted before implementing reforms with profound consequences for families and businesses across the country.”

He added: “We welcome the decision to convene a senior multi-judge panel and look forward to presenting the Claimants’ case in full at the Royal Courts of Justice in March.”

The Speaker of the House of Commons has been granted permission to intervene, reflecting arguments that the case engages questions of parliamentary privilege and the separation of powers.

At the heart of the dispute is whether the government complied with its own tax consultation policy, including the March 2011 “Tax Consultation Framework”.

The claimants argue that failure to follow that framework breached their “legitimate expectation” of proper consultation and amounted to a breach of “good governance” principles.

The APR and BPR reforms have already been revised four times, including a recent decision to raise the proposed relief cap from £1m to £2.5m — changes that critics say underscore the controversy surrounding the measures.

A House of Lords Economic Affairs Committee report concluded that those “U-turns” could have been avoided had the government consulted properly from the outset.

The Court will hear the case while the relevant inheritance tax measures remain under consideration in the Finance Bill 2026. The claimants stress they are not seeking to block parliamentary proceedings or overturn primary legislation.

Instead, they are asking the Court to declare that the consultation process was unlawful as a matter of public law. If the judges agree, it would be for the government to decide how to respond.

The outcome could have significant implications not only for agricultural inheritance tax relief, but for how future governments consult on tax reforms affecting family farms and rural businesses.