I Have Inherited Farmland. What Are My Options With the Land?

Gathering facts, not making decisions. In the first weeks the land is in the hands of whoever is administering the estate. Where there is a will, that is the executors it names. Where there is none, the closest living relative can apply to deal with the estate, through what is called letters of administration. The court document that confirms who has authority is the grant of probate, and GOV.UK's guidance on applying for probate says you should not make any financial plans or put property on the market until you have it.

Executors can still look into the land, take advice and talk through possible terms while the grant is being processed; an agreement is then normally signed once the grant arrives. Our guide to probate and selling land explains why, and what executors and administrators can each sign.

1. Gather the papers. The will, the death certificate, any farm records, rent receipts and grazing agreements, and the HM Land Registry register and title plan for each parcel. Land bought at different times is often registered under separate titles.
2. See how each field was owned. In the deceased's sole name, as joint tenants with someone else, or as tenants in common. That decides whether a field goes through the estate at all, and is explained further down this page.
3. List everyone who uses the land. A tenant, a grazier, a contractor, a neighbour who cuts hay, someone with a key to the gate. Note whether there is paperwork for each, or only a handshake.
4. Keep things ticking over. Let existing arrangements carry on as they are, keep the insurance in place and check gates, fences and water troughs. Avoid granting anyone a new, longer letting until the family has decided what it wants, because a long tenancy narrows every other option.
5. Get a date of death valuation that shows two figures. Ask the surveyor to report the land's agricultural value and its full market value, including any hope value, the premium a buyer will pay today for the prospect of planning permission later. The inheritance tax reliefs and any later Capital Gains Tax turn on the difference.
6. Talk to the estate's solicitor and accountant about inheritance tax. Which reliefs apply, whether tax on the land should be paid in yearly instalments, and the deadline for the first payment.
7. Hold the family conversation once the facts are in. With the valuation, the current income and the tax position on one sheet of paper, the routes below can be weighed by everyone at the same time.

For a family that wants to keep the land but not farm it, usually yes. Someone who does farm pays to use it, and the family's job shrinks to collecting rent and keeping an eye on the boundaries. There are two common ways to do it.

A Tenancy or a Seasonal Licence

A farm business tenancy, or FBT, is the modern form of agricultural letting: Defra's statistics describe FBTs as agricultural tenancies agreed since 1 September 1995 under the Agricultural Tenancies Act 1995, and the FBTs in its 2024/25 survey ran for an average of 5 years and 7 months. The lighter alternative is a grazing or mowing licence, which lets a neighbour graze stock or take a hay or silage crop for part of the year. Defra calls these seasonal agreements, farm tenancies where the length of term is less than 12 months, and their short term suits an estate while a family makes up its mind. How each kind is ended, and the notice it needs, is a subject of its own, picked up at the end of this section.

What Letting Earns

Defra's farm rents survey for 2024/25, covering March 2024 to February 2025 and published in February 2026, gives the clearest national picture. The average rent on land let on its own, without a house or buildings, under an FBT was £242 a hectare. Seasonal agreements averaged £166 a hectare. These are averages across England, so a particular field can let for well above or below them.

The example shows something families often do not expect. Land is a large asset that produces a small income, so letting it suits a family whose aim is to keep it, rather than one that needs money from it.

How Letting Sits With Tax

Rent is income and is taxed as such. For inheritance tax, letting does not stop the land qualifying for agricultural relief: section 116 of the Inheritance Tax Act 1984 gives the full rate where the property is let on a tenancy beginning on or after 1 September 1995, subject to the allowance described further down. Business relief is different. HMRC's manual says that where land was let to a tenant farmer who occupied it for their own farming business, business relief will rarely apply. That matters only where the land is worth more than its farming value, which the tax section explains.

One letting decision affects every other route: the length and terms of the tenancy. A long FBT without a way to take land back makes a later sale or option slower and harder. Our guide to tenancies and vacant possession explains how notice periods and break clauses work, so the letting can be shaped around whatever the family might want later.

Contract farming keeps the family as the farmer of the land while someone else does the work. Farmers Weekly's guide to contract farming agreements describes the arrangement as a joint venture between a landowner and a contractor, and it is most often used for arable land.

• The landowner provides the land, any buildings and usually a bank account with an overdraft facility, from which the farming costs are paid and into which the crop money goes.
• The contractor provides the labour, the tractors and machinery, and often agronomy and the marketing of the crops, in discussion with the landowner.
• Each side takes a first charge. The contractor's first charge pays for the work. The landowner takes a first charge too, but the same guide stresses that the only payment certain to be made is the one to the contractor.
• What is left is shared. After costs and the first charges, any surplus is split in a ratio agreed at the start, often in two tiers.
• The term is short and flexible. Arable agreements most commonly run for three years, and the guide suggests at least six months' notice on either side. Virtually every term can be agreed between the parties.

The appeal is that the family stays in farming without owning a tractor. The guide notes that an agreement is more flexible than a tenancy and lets an individual carry on trading as a farmer, with income tax and inheritance tax advantages compared with an FBT. Whether that supports business relief, the inheritance tax relief for business assets, in your family's case is a question for your adviser.

The catch is the word joint. The family shares the farming risk: a wet harvest, a poor price or a failed crop comes out of its share, not the contractor's. The same guide warns that where the landowner is not involved in decision making, or not seen to be taking any risk, a farmhouse may not be treated as the base of the farming business for agricultural relief, and it recommends that meetings are held and properly recorded. A family whose members live far away, or who have no wish to be involved, may find letting suits them better.

Selling is the simplest route if the family wants its money and nobody wants to keep the land. It produces one lump sum at the land's value as farmland, and it ends the family's responsibilities for the fields.

What Farmland Was Selling for in 2026

Two national measures give the range. Knight Frank's farmland index, which tracks bare arable and pasture land across England and Wales, put the average at £8,497 an acre for the second quarter of 2026. Strutt and Parker's figures for England over the first nine months of 2026, reported by Farmers Weekly on 12 October 2026, put arable land at £10,600 an acre and pasture at £8,700. The two measure slightly different things, and a particular field can sit well above or below both.

What the Market Was Like

Both sources describe a quiet, slow market. Knight Frank wrote that potential purchasers seemed in no hurry to buy, that motivated sellers were few and far between, and that it was taking longer to get deals over the line. Strutt and Parker found that farmers made up a larger share of buyers in 2026 than in any year for more than a decade, and that the area of land publicly marketed in the third quarter of 2026 was 16% below the five-year average. For an executor, that means allowing time for a sale and expecting the buyer to be a farmer.

The Tax on a Sale Soon After a Death

Selling inherited land shortly after the death often produces little Capital Gains Tax, because of how the base cost works. HMRC's manual explains that the value fixed at the date of death is the acquisition cost if either the personal representatives or the legatee subsequently dispose of the asset. If the land sells for about its probate value, there is little or no gain to tax.

The point to raise with an adviser is what happens afterwards. Farmland can qualify for agricultural relief in the family's own estates; the cash from a sale does not. Our guide to tax when selling land for development sets out that comparison with worked figures.

A sale as farmland is also final: any prospect of planning the land has goes with it to the buyer.

Quite naturally, because the route asks very little of the family and leaves the land in its hands until completion. Under our option agreement, the price is fixed with the family before any planning work begins, set down in the agreement as a sum of money, and pitched above what the land is worth in its current use. All the planning work is then ours to commission and pay for, at our own cost and risk. You keep owning and using the land, and any rent or grazing income stays with the family. If planning permission is secured, we complete the purchase and the agreed price is paid on completion. If it is not achieved, the land stays with the family and nothing is owed.

Can Executors Sign an Option?

Where the will and the law allow it, yes. The Trusts of Land and Appointment of Trustees Act 1996 gives trustees of land all the powers of an absolute owner, in section 6, and section 18 applies those provisions to personal representatives, with appropriate modifications. A full owner can grant an option, so executors can too. Section 8 lets the document that created the trust, here the will, exclude those powers or make them subject to someone's consent, so the will needs checking first. In practice the option is signed once the grant of probate is in hand.

If the estate is distributed while the agreement is running, it does not need redoing. Land can be passed to the beneficiaries subject to a registered option, which then binds them, as our guide for executors dealing with land explains.

1. A free desktop review. We look at the title, the constraints, the access and the council's position, and tell the executors and the family whether the land has development potential. This can happen while probate is being dealt with.
2. A price in writing. If it does, we put one figure to the family, fixed at the outset and higher than the land is worth as it stands.
3. Signing. Once the grant is in hand, the executors, or the beneficiaries if the land has already passed to them, sign through their own solicitor. We contribute to the family's solicitor's and land agent's fees, so it costs the estate nothing to have it done properly.
4. The planning work. We arrange the surveys and drawings and submit the planning application, or, where the local plan is the better route, put the land forward to the council through it. The family carries on letting or using the land.
5. The decision. The agreement stays in force for as long as a planning application or appeal is being decided.
6. Completion. Once permission has been secured, we complete the purchase and the agreed price is paid, with the milestones set out in the agreement.

What a desktop review looks at, and how the figure is reached, is set out in our guide to working out the price for your land.

Yes, and for many families this is the answer that suits everyone. Development potential is rarely spread across a whole holding. It usually sits in the one or two fields that touch the edge of a village or town, close to roads, homes and services. The rest of the land can be let, contract farmed or kept exactly as it is.

A mixed route also helps when the family disagrees. The sibling who wants to keep the land in farming keeps most of it in farming. The sibling who wants a return sees one field go forward, at a price agreed at the start, without anything being sold until permission is secured.

To work well, the two arrangements have to fit together. These are the facts about your own land that make the mix straightforward to set up:

• Which field or fields sit next to the village or town, and which parcel of the title each one is in.
• How each field is reached from the public road today, and how the farmed land will still be reached afterwards.
• Whether a tenancy or grazing licence covers the edge field, and when and how that field could be taken back.
• Whether any drains, water supply, tracks or rights of way cross from one part of the holding to the other.
• Who in the family will be the main point of contact for each arrangement.

None of these needs answering before a first conversation. A desktop review starts from the title plan and answers most of them from the map.

Capital Gains Tax Starts Again at the Date of Death

The tax clock starts again on the death. Whoever later sells, whether the executors or the family member who receives the land, is treated as having acquired it at its value on the date of death. HMRC's manual adds that the same value should be used for inheritance tax and Capital Gains Tax. So the date of death valuation does two jobs at once: it sets the inheritance tax now and the base for any tax on a sale later.

Agricultural Relief Covers Farming Value Only

Agricultural property relief reduces inheritance tax on the agricultural value of land. Section 115 of the Inheritance Tax Act 1984 defines that as the value the land would have if it were subject to a perpetual covenant prohibiting its use otherwise than as agricultural property: in plain words, its value if it could only ever be farmed. HMRC's inheritance tax manual says plainly that agricultural relief will not be available in respect of the excess value, meaning anything above farming value, such as development or hope value. Business property relief may cover that excess, but only where the land was used in a qualifying business; for land let to a tenant farmer, the manual says it will rarely apply.

The 2026 Changes

The reliefs changed for deaths from 6 April 2026. HMRC's policy paper on the changes, updated in March 2026, sets out a £2.5 million allowance for the combined value of property qualifying for 100% agricultural and business relief. Relief at the lower rate of 50% applies to qualifying property above £2.5 million. Any unused part of the allowance can be transferred to a surviving spouse or civil partner.

The figure moved before it took effect. The reform was first announced at the Autumn Budget 2024 with a £1 million allowance; the policy paper records that on 23 December 2025 the government said it would be £2.5 million instead. The Finance Act 2026 then amended section 116 of the 1984 Act to bring in the new rates. Because the relief now depends on whether the death fell before or after 6 April 2026, and the figure was revised once before the law took effect, ask your adviser to confirm the rules that applied on the date of the death, not those in force when you read this.

Paying Inheritance Tax on Land in Instalments

Tax on land does not have to be found in one go. GOV.UK's page on paying inheritance tax by yearly instalments explains that tax on land and buildings can be paid in equal annual instalments over ten years, as long as the land is not sold, and that the first instalment is due at the end of the sixth month after the death. For assets inherited from 6 April 2026 that qualify for agricultural or business relief, the instalments are interest-free, though a late instalment still carries interest. If the land is sold, the tax still owing on it has to be paid in full.

That last rule ties the tax to the route. Letting or contract farming leaves the instalments running. A sale as farmland, or the completion of an option, brings the outstanding tax forward, so it is paid from the sale money.

It is common, and there is a legal framework behind the family conversation. The first question is how the land was owned, because that decides who has a say at each stage.

While the Estate Is Being Administered

During the administration, the executors make the decisions. Section 18 of the 1996 Act applies the trustee rules to personal representatives, but expressly leaves out section 11, the duty to consult beneficiaries, and section 14, the right to apply to court about the land. Sensible executors talk to the family anyway, but the legal duty to consult comes later.

Once the Land Has Passed to the Family

When land is owned by two or more people together, the law treats it as held on a trust of land, governed by the same Act, with the legal owners as its trustees. Section 11 then requires the trustees, so far as practicable, to consult the adult beneficiaries entitled to the land, and so far as it fits the general interest of the trust, to follow their wishes or, in a dispute, the wishes of the majority according to the value of their combined interests. The will or deed that created the trust can switch this duty off, and it does not apply at all to a trust arising under a will made before the Act came into force, which matters for land left under an old family will. Where a family is completely stuck, the court has power under section 14 to make orders about how the trustees use their powers, but that is slow and costly.

What Helps in Practice

Most disagreements are about information, not law. One sibling has heard the land is worth a fortune; another thinks it is only a field. Putting the same facts in front of everyone at once, the valuation, the rent the land could earn, the tax position and whether any part has development potential, settles more family arguments than any statute.

Then the tenancy is part of what you have inherited, and its terms matter for every route. Who the tenant is, when the tenancy began and what the agreement says decide how much rent the land earns, whether it can be sold with vacant possession and how and when any part could be taken back for development. Older tenancies, agreed before 1 September 1995 and called full agricultural tenancies in Defra's statistics, work under different rules from modern ones, and their rents are reported as a separate category from FBTs in the same statistics. Find the agreement, or establish the history if there is none, before the family settles on a route. Our guide to tenancies and vacant possession explains each kind of letting, the notice it needs and how option agreements plan around it. A tenant does not rule out putting a field forward; it shapes the timetable.