Date posted: 27th Feb 2026
From 6 April 2026, the 100% relief threshold for Agricultural Property Relief (APR) and Business Property Relief (BPR) will increase to £2.5 million per estate (from the proposed £1m), reflecting the government’s response to concerns raised by farming and business communities about preserving family assets and succession plans.
The main changes
- Higher 100% relief limit: Up to £2.5 million of qualifying assets on an estate will be eligible for 100% relief from inheritance tax.
- Increased protection for couples: The relief can be transferred between spouses and civil partners, allowing up to £5 million of qualifying assets to pass free of inheritance tax between them.
- Using other allowances: When combined with the standard £325,000 nil-rate bands, many married couples may be able to transfer farms or businesses worth up to £5.65 million without any inheritance tax charge.
- Relief on amounts above the threshold: Qualifying assets above the £2.5 million (or £5 million for couples) limit will still benefit from 50% relief, meaning the effective rate on the excess is reduced from 40% to 20%.
Why it’s important
These reforms are expected to significantly reduce the number of estates affected by the earlier proposals, with most typical family farms and smaller businesses no worse off than under the current regime. Larger estates will still contribute more inheritance tax overall, but at a reduced effective rate on the value above the new threshold.
Next steps
The qualification criteria and valuation rules for APR and BPR remain detailed and technical, so it is sensible to review your Will and succession plans ahead of April 2026 to ensure you are taking full advantage of the updated reliefs and allowances. Professional advice can help ensure your family business or farm is structured in the most efficient way for the next generation.
As ever, we are here to help.
