The Government has announced a further change to its planned inheritance tax reforms affecting agricultural property relief (APR) and business property relief (BPR).

If you own significant farming or business assets (or hold them in trust), this is worth paying attention to.

What’s changing?

From 6 April 2026, a new allowance will cap the amount of qualifying agricultural and business property that can receive 100% inheritance tax relief.

The allowance will now be £2.5 million per estate, increased from the previously proposed £1 million.

Where qualifying business and agricultural assets exceed the allowance, the excess is expected to qualify for 50% relief, rather than 100%.

How the allowance works

• Individuals will have an allowance that refreshes every seven years.
• Trusts will have an allowance that refreshes every 10 years.
• The allowance will be available to both individuals and trusts.
• It will also be transferable between spouses and civil partners.

In practical terms, that means a couple may be able to apply up to £5 million of 100% APR and BPR between them, in addition to other inheritance tax allowances such as the nil rate band.

Fewer estates affected

The change is being delivered through an amendment to the Finance Act 2025/26, which has now been brought forward and enacted.

According to the Government, increasing the threshold to £2.5 million will reduce the number of APR-claiming estates affected in 2026/27 from 375 to 185.

The policy itself has been revised several times since it was first announced at the Autumn Budget 2024, so it’s clear this is still an area of close scrutiny.

What this means for you

If you have substantial farming or business assets (particularly if they’re held within trusts), it would be sensible to review your succession and estate planning ahead of April 2026.

Reliefs are still generous, but the cap introduces a new layer of planning. The right structure will depend on asset values, ownership arrangements and long-term intentions.

If you’d like to sense-check how these changes affect you, it’s far easier to review things now than after the rules take effect.