Tax experts have accused Starmer of calling his £3mn farm tax claim ‘misleading’.

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Tax experts have questioned claims that Sir Keir Starmer’s “typical family” farm will be exempt from inheritance tax for £3mn.

The government figure is “misleading” because it requires farmers to meet complex conditions, including the division of farm ownership when one spouse dies.

The Prime Minister used the number repeatedly earlier this month when he defended a controversial budget decision to impose inheritance tax on agricultural properties above £1mn, saying “the level is £3mn” in a “typical family matter”.

Emma Haley, legal director of law firm Bodle Hatfield, said: “The £3m bailout is not wrong, it’s more misleading.” “The problem is that there are various traps that limit everyone’s allowance.”

The £3mn figure is made up of several components: £1mn of farm property relief coming from April 2026; £325,000 exemption for all asset classes; and £175,000 to pass the house on to children or grandchildren.

This is £1.5mn which is passed directly by the spouse to their children. Both partners must release this for a total of £3mn.

But this means that any farms owned by a single person or couples who are not married or in a civil partnership cannot reach the £3mn allowance.

There are other factors that make it difficult to get the full £3mn allowance.

If both partners’ share of the farm exceeds £2mn and is lost by £2.35m, the residence exemption is reduced.

In order to reach the £3mn allowance, couples must leave £1mn of their assets to the other spouse to prevent the second spouse from passing on £2m if the first spouse dies.

The result is that to qualify for full relief, ownership of the farms will probably have to be split.

“On the first death, you have to make sure the property passes to the other person and they become joint owners with their spouse,” says Haley in Bodle Hatfield. “It’s going to be very complicated.”

Camilla Wallace, senior partner at Wedlake Bell, reckons the £3m figure is “unlikely to be realized when you drill down” and that £2.65mn is more likely to be claimed for larger farms.

The Treasury declined to comment. The government says the policy, which applies to farms worth more than £1mn, will only apply to a quarter of commercial family farms. But the National Farmers Union says the real figure is three-quarters of farms.

While much of the discussion about the relief has focused on farmers, it also applies to business owners as the Budget has changed the Business Property Relief (BPR) in the same way as the Agricultural Property Relief. Family farms often have to use both APR for their land and BPR for their livestock and machinery.

The Treasury estimates that changes to APR and BPR will raise a total of £1.8bn in 2029-30. Calculations by consultancy CBI Economics estimate that only £387mn of this figure could be derived from APR.