The Government has confirmed further changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) following the November Budget. These updates will be included in the Finance Bill next month and will affect Inheritance Tax planning for farmers and business owners.
Higher APR and BPR Threshold from April 2026
From 6 April 2026, the amount of Agricultural Property Relief and Business Property Relief available at 100% relief will be £2.5 million. Any qualifying agricultural or business assets above £2.5 million will attract 50% Inheritance Tax relief.
This is a significant improvement on earlier proposals, which would have limited tax relief to £1 million per person.
The change was confirmed on 23 December 2025 following feedback from farming communities, family owned businesses, and their professional advisers.
What this means for Farmers and Family Businesses
The revised thresholds aim to protect working farms and trading businesses, but there will still be many farms and businesses affected.
The £2.5 million allowance will be transferable between spouses and civil partners meaning a couple can benefit from 100% relief on up to £5 million of combined business and agricultural property.
The changes also revise the trust relief allowance from £1 million to £2.5 million, creating further scope for effective estate and succession planning.
Aaron Hemmington, Tax Partner at Hawsons, said:
“This is a positive revision to the proposals for family farms and owner managed businesses. However, there are many businesses and farms with values above the revised allowance. It is therefore important that businesses and farmers review the values of their businesses and look to undertake planning where appropriate.”
Planning Ahead
With Inheritance Tax rules continuing to evolve, it is important for farmers and business owners to review their estate planning early. Understanding how APR and BPR apply to your assets can make a meaningful difference to future tax liabilities.
If you would like to discuss how these changes affect your farm or business, our tax team is always happy to help.
Pete Wilmer
Corporate Finance Partner