The Treasury believes that, with careful financial planning, about 500 estates a year will be liable to pay the tax.
But the Department of Agriculture, Environment and Rural Affairs says its research shows almost half of all farms in Northern Ireland will pass the threshold, external due to land values alone, with the dairy sector particularly badly hit.
The Dunlops are typical of many farming families in Northern Ireland, as they have diversified on the dairy farm that has been in their family for three generations.
Their agricultural contracting business offers baling services and low-emission slurry spreading to their neighbours, but the expensive equipment it requires will also contribute to the farm’s valuation for inheritance tax.
“What we’ve seen is that a lot of people have realised, ‘well this affects my farming business’,” warned Sean McCann, a chartered financial planner at the agricultural insurer, NFU Mutual.
“But it’ll also affect the diversified businesses that are run by many farmers as well, so it’s going to have a double-whammy on many of them.
“But that level of diversification, it’s significantly higher in Northern Ireland.”
