Wednesday 28 January 2026 12:51 pm
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Wednesday 28 January 2026 12:52 pm
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Farmers protesting. Photo by Andrew Aitchison / In pictures via Getty Images
The High Court has green-lit an urgent hearing at the High Court over the government’s inheritance tax raid on agricultural assets and family firms.
The proposed changes to agricultural property relief (APR) and business property relief (BPR) represent one of the biggest shifts in UK inheritance tax (IHT) policy in decades, following the government’s initial increase of the threshold to £1m.
However, in December, Labour announced a partial U-turn after a year of backlash from rural communities by lifting the threshold to £2.5m from £1m, effective April 2026.
Now, the policy is facing legal action from farmers Thomas Martin and George Martin, the campaign group Farmers and Businesses for Fair Tax Relief, and the professional services firm Alvarez & Marsal, all seeking a judicial review.
The parties are arguing that the government’s decision to undertake only a limited technical consultation on a narrow aspect of the proposed reforms was unlawful.
The claimants say that the lack of a more comprehensive consultation fell well short of longstanding legal standards and breached public law duties towards them and others.
Claims Labour’s policy is ‘unlawful’
However, as the Finance Bill is already at the Committee stage, the court cannot order a new consultation or prevent the law from coming into effect. Instead, the claimants are seeking a formal declaration that Labour’s process was unlawful.
Despite “regrettable administrative delays” by court staff, Mrs Justice Lang has ordered the case to proceed to a “rolled-up” hearing over two days in February or March 2026.
Partner James Austen at Collyer Bristow, instructed for the claimants, noted that “rolled-up” hearings are “exceptionally rare” and reflect the case’s critical importance.
The Speaker of the House of Commons has been granted permission to intervene as an interested party to address matters of Parliamentary privilege and the separation of powers.
Marvin Rust, head of Alvarez & Marsal tax EMEA, added: We work with many family businesses and farms who need certainty. Limiting longstanding inheritance tax reliefs is an important legislative change, which was introduced without proper consultation, contrary to well-established principles. That is not how policy of this magnitude should be made.”
“I look forward to taking this important case to court to ensure due process is followed,” Martin added.
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