Agricultural Property Relief and Business Relief: What Changed in April 2026?
For farmers, landowners and business owners, 6 April 2026 marked a significant change to Inheritance Tax planning.
Agricultural Property Relief (APR) and Business Property Relief (BPR) have traditionally been powerful tools for reducing or eliminating IHT on qualifying agricultural and business assets.
However, the rules have now changed.
From 6 April 2026, the amount of qualifying agricultural and business property that can receive 100% relief is subject to a £2.5 million allowance. Property above the available allowance can generally qualify for relief at 50% rather than 100%.
Why is this important for farmers?
Consider a farming family with qualifying agricultural assets worth £4 million.
Under the previous rules, qualifying property could potentially receive 100% APR, meaning it could pass without an IHT charge attributable to that property.
The new rules mean that the first £2.5 million may qualify for 100% relief, subject to the detailed rules, while the excess may receive 50% relief.
That means part of the value can potentially become exposed to IHT.
This is a major consideration when deciding how a farm should be passed to the next generation.
What about married couples?
There is potentially some good news.
Unused 100% APR/BPR allowance can be transferred from a deceased spouse or civil partner to the surviving spouse or civil partner.
This means that, in appropriate circumstances, a surviving spouse could potentially have up to £5 million of 100% relief allowance available.
This makes the drafting of the first spouse’s Will particularly important.
A Will that simply leaves everything to the surviving spouse may be perfectly appropriate in many families, but it should not automatically be assumed that this is the best structure for every farming or business-owning family.
Business owners need to review their position too
The changes do not only affect farmers.
They also affect owners of qualifying businesses and certain business interests.
The £2.5 million allowance applies to the combined value of qualifying agricultural and business property.
Certain shares, including shares traded on markets which do not meet HMRC’s definition of a listed market, such as AIM shares, can also have different treatment and may only qualify for 50% relief.
Could your Will make a difference?
Absolutely.
The Will itself does not create APR or BPR.
However, the way assets are left can have a significant impact on how allowances and exemptions operate.
It is therefore important to consider:
- Who should inherit the farm or business?
- Should ownership be divided?
- Should some assets pass to a spouse?
- Could a trust have a role?
- How will the inheritance tax bill be funded?
- What happens if one child takes over the business while others receive different assets?
- What happens if the farm or business is sold after death?
These are not simply tax questions.
They are family succession planning questions.
For farming and business families across Norfolk, early planning is increasingly important.
The new rules do not necessarily mean that every farm or business will face an IHT bill, but they do mean that assumptions based on the old rules should be revisited.
This article is general information. Agricultural and Business Relief rules are complex and professional tax advice should be obtained where significant assets are involved.