Aysha Marley, of accountancy firm RSM, encouraged farmers to start thinking about their succession plans and the “possibility of handing over part of the farm to the next generation”.

However, Toby Tallon, of wealth manager Evelyn Partners, warned this may not be a realistic option for some farmers.

Under the “profit reserve” rules, to be exempt from inheritance tax, you cannot yet benefit from this donation.

For example, if you gifted your farm to a family member but still lived there, they would be counted toward the value of your estate and would be liable for inheritance tax.

In some cases you can get around this by paying rent to the new owner of record at commercial rates, but this is not always practical or possible.

Mr Tallon said: “It’s the frustration with gifts. You can only do this if you can afford it. If you do not need the capital or income that this agricultural element derives to live.

“But while on paper most farmers appear asset rich, they are cash poor and their margins are very uncertain. So if they give away some of their assets, what will they then live on?”

Divide the farm and get additional allowances

One strategy that family farms should consider, wealth managers advise, is taking steps to increase the number of owners to increase the £1 million threshold.

A married couple who own a farm together could split it in two, meaning they would be entitled to £2 million in farm property relief.

This is in addition to the usual £1m joint inheritance tax allowance if a married couple leaves their property to a direct descendant, meaning a farm worth £3m of pounds sterling could escape paying any inheritance tax.