York The government has confirmed welcome changes to the availability of agricultural property relief (“APR”) and business property relief (“BPR”) as part of the inheritance tax (“IHT”) regime for deaths occurring on or after 06 April 2026.
As announced just before the Christmas break, the cap on 100% relief on agricultural and/or business assets will now be £2.5million per person.
The allowance will be transferrable between spouses and civil partners (even if the first spouse/civil partner died before the policy is introduced) – creating an effective £5million IHT shelter for couples.
Assets above this level will continue to qualify for 50% relief.
These changes significantly reduce the number of estates expected to pay additional IHT (compared to the announcements proposed in the 2024 Autumn Budget) and provide greater flexibility for farm and business succession planning.
However, the rules remain complex, and existing Wills, partnership structures and succession plans may need to be revisited.
Despite this mild reprieve our message remains the same – now is an ideal time to review your planning ahead of April 2026
If you would like tailored advice on how the new reliefs will apply to your estate or business, please contact our Agricultural Team to arrange a review.
The revised approach follows strong representations from the farming and professional communities. Industry bodies highlighted that many family farms – often exceeding 100 acres – can easily surpass earlier limits based on land values alone, before taking account of livestock, machinery, or other business assets. The ability to claim APR and/or BPR also depends on how assets are owned and used, the business’ structure (including the terms of any agreements between the owners, partners, directors or shareholders), and the terms of an individual’s Will.
The government has stated that the revised threshold will significantly reduce the number of estates affected by the reforms. Treasury forecasts suggest that around 85% of estates claiming APR in 2026/27 are now expected to pay no additional IHT, compared with earlier projections.
Professional advisers have welcomed the changes, noting that they provide families with greater flexibility to plan succession, preserve reliefs across generations, and reduce the need for extensive restructuring that had previously been anticipated.
What this means for you
While the changes are positive, the new regime remains complex. The interaction between APR, BPR, transfers between spouses/civil partners and wider estate planning means that existing Wills, partnership agreements, and succession plans may now warrant review ahead of April 2026.
If you would like to discuss how these reforms may affect your farm, business, or family estate – and how best to plan in light of the new thresholds – our Agricultural Team would be pleased to help.
Please contact us on York 01904 716000, Wetherby 01937 485210 or Malton 01653 692247 or email law@warekay.co.uk.
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