Farming News - Uptick in pre-nup and post-nup agreements for farming families after budget announcement

Uptick in pre-nup and post-nup agreements for farming families after budget announcement

Specialist agricultural lawyers at national firm Clarke Willmott LLP, have reported an increase in enquiries around pre-nup and post-nup agreements for farmers after the government announced changes to inheritance tax surrounding farms.

 

 

With succession planning now at the forefront of farming families' minds, private client lawyers are in demand providing advice on complex tax issues, but Clarke Willmott says their family law specialists have seen an uptick in clients wanting to secure nuptial agreements too.

 

Holly Smith, an associate in Clarke Willmott's family team, said: "Pre- and post-nuptial agreements can help protect farming assets and farming business interests.

 

"They can cover land, farming equipment, livestock, agricultural businesses and any other farming related assets owned by either spouse prior to the marriage or received as a gift or inheritance during the marriage.

 

"Many farming families recognise the importance of safeguarding specific assets and want to ensure that they stay within the family. A nuptial agreement will identify assets, owned individually or jointly, and will outline how those assets, as well as any future inheritance or business interests will be protected and managed in the event of a divorce.

 

"By entering into an agreement, the aim is to ensure clarity, fairness, and long-term preservation of family farms and agricultural assets, while mitigating the potential for conflict in the event of a later divorce or separation."

 

New plans announced by the government in October will mean that from April 2026, combined agricultural and business property assets up to £1 million will still receive 100% relief but anything above that will be taxed at an effective rate of 20%.

 

Farmers say these inheritance tax reforms will lead to extremely challenging conditions and may even result in food shortages.

 

Holly said: "We understand how worried our agricultural clients are about these new plans and are encouraging them to take early action and seek legal advice at the earliest opportunity to protect their assets.

 

"Outside of the new reforms there are many other reasons nuptial agreements are important to consider. For example, when bringing the next generation on board, when gifting assets to children or business partners or when setting up a Trust or reviewing the business structure.

 

"By considering all scenarios ahead of time and addressing the issues upfront, a nuptial agreement provides clarity and protects agricultural assets, giving peace of mind for the future."

 

Holly advises clients on a variety of family law matters, covering all aspects of divorce, family businesses and disputes.

 

Clarke Willmott is a national law firm with offices in Birmingham, Bristol, Cardiff, London, Manchester, Southampton and Taunton.