Farmers and business owners have filed a High Court challenge against the Government’s inheritance tax reforms, arguing that ministers acted unlawfully by failing to properly consult on changes that could transform the future of family-run businesses.
The two-day judicial review, which began at the Royal Courts of Justice on March 17, will examine whether Chancellor Rachel Reeves breached established consultation principles when amending Agricultural Property Relief (APR) and Business Property Relief (BPR).
The case was brought by Cambridgeshire farmer Tom Martin, along with his father George Martin and campaign group Farmers and Businesses for Fair Tax Relief. The lawsuit is supported by the law firm Collyer Bristow on behalf of the consulting firm Alvarez & Marsal.
At the heart of the legal argument is the government’s tax consultation framework, introduced in 2011, which requires ministers to hold at least one formal public consultation on major tax reforms. The plaintiffs argue that the inheritance tax changes, which affect the passing down of farms and businesses across generations, clearly meet that threshold, but were introduced without significant input.
Ahead of the hearing, Tom Martin said he had been forced to give up his work on the farm to take legal action, describing the case as a fight for justice. Outside the courthouse, activists gathered under banners reading “Keep Farms and Businesses in the Family,” drawing attention to growing unrest in rural and business communities.
Under the proposed changes, due to come into effect from April 2026, inheritance tax relief will be structured as follows:
• 100% relief for the first £2.5 million of qualifying agricultural and business assets
• 50% relief for assets above this threshold
• Up to £5 million relief for married couples or civil partners, plus standard allowances
• Any tax liabilities, payable over 10 years, interest free
While the government is positioning the reforms as a balanced tax approach, critics argue they could fundamentally change succession planning for family businesses and businesses.
The plaintiffs’ legal representatives say the lack of consultation has led to significant uncertainty.
Alexander Marcham, managing director of Alvarez & Marsal Tax, said many affected businesses had been built over generations and were now faced with difficult decisions without clarity. He warned that the reforms could disrupt long-term planning for succession, investment and ownership structures.
The plaintiffs argue that the failure to consult denied them a say in policy development, particularly given the scale of the financial and operational impact.
The government is contesting the case, saying judicial intervention risks encroaching on parliamentary territory. However, the plaintiffs counter that the decision not to consult was made before the legislation reached Parliament, so it could be challenged in court.
A verdict is not expected immediately. The verdict is expected to be reserved and announced in writing in the next few months.
Beyond the immediate tax implications, the case could set an important precedent for the development of financial policy in the UK. If the court rules in favor of the plaintiffs, it may increase the requirement for formal consultation on key tax reforms and potentially change the way future budgets and policy changes are introduced.
For now, however, farming families and entrepreneurs remain in a state of uncertainty, awaiting a decision that could have lasting consequences for generational wealth, the rural economy and the broader business landscape.
