Almost three quarters (73.7%) of Northern Ireland’s land area is cultivated. Of the 26,131 farms here, 20,603 are described as “very small”, external.

IHT only applies when land is inherited. It is therefore difficult to predict how many farms could be affected each year.

But on a basic calculation using land with buildings, Mr McKervey said “many” could be in the IHT band.

A farmer owning 100 acres would have land valued at £1.8 million before including livestock or machinery.

This would leave them £800,000 above the threshold.

Mr McKervey said: “There are other reliefs and you can claim them, but if you assume that’s not the case, then the 20% inheritance tax comes to £160,000.”

Meanwhile, a study by Northern Ireland’s Department of Agriculture, Environment and Rural Affairs (Daera) said it would be “reasonable to assume” that agricultural land will be valued at around 15,000 £ per acre in 2026.

This means that 27 hectares, or around 67 acres, would equate to an agricultural value of £1m, putting “around a third” of farms within the scope of inheritance tax.

A third equates to about 8,700 farms, according to the 2023 agricultural census.

The dairy sector is the hardest hit: around 75% of farms would be subject to inheritance tax.

The study adds that the £1m cap “potentially brings a significant number of farms within the scope of inheritance tax and is well above the 4% to 7% of estates likely to be liable inheritance taxes in general during the coming period.