Zara Fletcher, Executive Senior Associate, explains the recent changes to APR and BPR and what they mean for farming and business families.
On 23rd December 2025, the Government announced a U-turn on its plans to tax farmers and business owners, that were due to take effect in April 2026.
In the 2024 budget, the Chancellor said that Agricultural Property Relief (APR) and Business Property Relief (BPR), which are the tax reliefs that help farming and business families to pass on assets (currently without any inheritance tax charges), were going to be capped at £1m with assets valued over £1m charged at an effective rate of 20%.
On 23rd December it was revealed that the allowance for the 100% rate of relief would instead be capped at £2.5m, which will be transferable between spouses like the current Nil Rate Band for Inheritance Tax. Therefore, farming and business married couples and civil partners can pass up to £5m in qualifying assets free from inheritance tax, on top of the normal inheritance tax allowances.
This U-turn will significantly reduce the number of farms and businesses that would otherwise have been exposed to inheritance tax, had the Government proceeded as planned. The Government estimates that as a result, the number of farming families affected by the reforms next financial year will fall from 375 to 185. For more information please visit the Government UK website.
If you need advice on how these changes may affect you, please contact our specialist team today.
Call 01206593933 to speak to our specialist team, or complete the form below.
Disclaimer
The content of this article is provided for general information only. It does not constitute legal or other professional advice. The information given in this article is correct at the date of publication.
A Mackman Group collaboration - market research by Mackman Research | website design by Mackman
