What Are Agricultural Property Relief and Business Property Relief?
Currently, when an individual dies owning agricultural assets or business assets and they meet the specified ownership requirements, then their estate can be eligible for unlimited relief at 100% or 50% on those assets. These reliefs are known as Agricultural Property Relief (‘APR’) and Business Property Relief (‘BPR’).
For deaths that occur on or after 6th April 2026, the rules are changing significantly. In this blog, our Wills and Inheritance Tax team provides some information on these upcoming changes.
How the Autumn Budget 2024 Changed APR and BPR
In the Autumn Budget of 2024, the Government announced that, from 6th April 2026, the combined reliefs of APR and BPR would be capped at £1 million pounds and would not be able to be transferred between spouses and civil partners. The first million pounds of qualifying assets would receive a relief of 100%, and anything in excess of that would receive a relief of 50%, which would have meant that Inheritance Tax and eligible assets over £1 million would have been taxed at 20%. This caused a lot of concern for farm owners, business owners and professionals, as in effect the relief was due to become a ‘use it or lose it relief.’
The 2025 Update: Higher Limits and Transferability Between Spouses
Thankfully, in the Autumn Budget of 2025, the Government announced a change in relation to how the combined APR and BPR limit would be handled post April 2026. They confirmed that following a review, the combined relief would now be transferable between spouses and civil partners in the same way that the standard Inheritance Tax threshold is. In addition to this change, in December 2025, they announced that the value of the exemption would increase from £1 million to £2.5 million.
How APR and BPR Will Work From 6th April 2026
This means that for deaths that occur on or after 6th April 2026, where the individual has qualifying assets for APR or BPR, anything up to the value of £2.5 million will receive relief at 100%. Anything in excess of £2.5 million will receive relief at 50% and depending on who those assets are left to will be taxed at an effective rate of 20%. The relief will now be transferable between spouses and civil partners. This means that where assets are left to a spouse or civil partner on first death the entire transfer will be covered by spousal exemption and will not attract a charge to Inheritance Tax. When the surviving spouse or civil partner dies their estate will be able to claim 100% relief on qualifying assets for APR or BPR up to £5 million. When combined with the nil rate band (which is frozen at £325,000 until 2031) this means that married couples or civil partners can leave up to £5.65 million tax free.
What This Means for Your Estate Planning
The amendment to the upcoming changes in relation to APR and BPR will provide some relief to land and business owners, as the value of the assets which can be passed on with 100% relief has increased. However, it is still important to review your circumstances and ensure that your structuring meets your needs.
Wills and Inheritance Tax Solicitors
The above is a brief summary of the changes that are due to come into effect from 6th April 2026 in relation to APR and BPR. If you have any concerns about how the changes will affect you, our specialist Wills and Inheritance Tax team at Bridge McFarland LLP is here to help. We will be happy to assist you in reviewing your current circumstances, assess whether your assets qualify for relief, and ensure your Will and estate planning arrangements are structured to make the most of the reliefs available to you. To contact a member of our team, call 0800 987 8800 or fill in our online enquiry form.
