Mr Tallon said: “This is the frustration with gift giving. You can only do this if you can afford it. Unless you need the capital or income generated by that farming element to survive.

“But while on paper most farmers appear to be asset rich, they are cash strapped and margins alone are very uncertain, so if they give away some of their assets, then what will they get by on?”

Divide the farm and benefit from extra allowances

One strategy family farms should consider, asset managers advise, is to take steps to increase the number of owners to raise the £1 million threshold.

A married couple who own a farm together can split it in two, meaning they could be eligible for £2 million in agricultural property relief.

This is on top of the usual joint inheritance tax relief of £1 million if a married couple leaves their property to a direct descendant; This means a farm worth £3 million could avoid paying any inheritance tax.

In theory, this process can be repeated many times by dividing the property among multiple family members to increase the benefit threshold.

But Ms Marley warned there were risks.

He said: “This needs to be considered carefully as there will be business implications of involving wider family members in farming.

“This adds additional complexity to the business, including the fact that already low income or losses may need to be shared more widely, and wider family members may not want to be involved.”

Life insurance

Another strategy farmers can consider is getting a life insurance policy and turning it into trust. This will not remove bereaved families from having to pay inheritance tax, but it will provide a lump sum outside your estate that can be used to help pay the tax.

A whole life policy provides security as it provides permanent coverage and therefore a guaranteed payout. However, such policies are much more expensive than a whole life policy, which pays off only if death occurs within a certain period of time.