If you own a farm, land, or a family business, you may already be aware that inheritance tax rules are changing. While recent headlines have caused understandable concern, the key message is this - do not panic, but do not ignore it either. From April 2026, significant changes will take effect to agricultural property relief (APR) and business property relief (BPR). These reliefs have long played a vital role in helping farming families and business owners pass assets to the next generation without triggering large inheritance tax bills. Understanding what is changing, and reviewing your plans early, can give you more control, flexibility, and peace of mind.
Agricultural property relief and business property relief are inheritance tax reliefs that can reduce, or in some cases eliminate, the inheritance tax due on qualifying agricultural or business assets when someone dies.
These reliefs can also apply to certain lifetime gifts of qualifying assets that become chargeable on death.
Until now, qualifying assets could often pass at up to 100 percent relief from inheritance tax, regardless of their value. For many farming families and business owners, this has been essential in keeping land and businesses intact and financially viable for the next generation.
In the Autumn Budget 2024, the government announced that unlimited APR and BPR would come to an end. Following consultation and strong opposition from farming and rural communities, the proposals were revised in late 2025, but they still represent a significant shift.
Key APR and BPR changes from April 2026
- Each individual will have a £2.5 million cap on the combined value of qualifying assets eligible for 100 percent APR or BPR
- Any qualifying assets above £2.5 million will receive 50 percent relief
- This means the excess value could be subject to inheritance tax at an effective rate of 20 percent
- Any unused allowance will be transferable between spouses and civil partners
- By combining two £2.5 million allowances and two £325,000 nil rate bands (where available), married couples and civil partners may be able to pass on qualifying assets worth up to £5.65 million free of inheritance tax
This represents an increase from the government's original proposal of a £1 million cap, which would not have been transferable between spouses and civil partners. While the increase to £2.5 million has softened the impact, the removal of unlimited relief remains a major change.
For many families with land-rich estates or asset-heavy businesses, these changes could result in a significant inheritance tax liability where none was expected before.
With the end of unlimited APR and BPR now confirmed for April 2026, it is essential to review your position sooner rather than later. Plans that worked well under the previous rules may no longer achieve the outcome you intend.
Review your wills, trusts, and succession plans
Existing wills, trusts, and business succession arrangements should be reviewed in light of the new inheritance tax rules. Even small legislative changes can have substantial consequences if plans are not updated.
Look beyond inheritance tax alone
Good planning is not just about reducing tax. It is also an opportunity to reflect on what matters most to you - protecting your family, maintaining the viability of the business, and ensuring clear arrangements are in place for the future.
Check that asset and business valuations are up to date
The value of land, farms, businesses, and investments can change significantly over time. Accurate and current valuations are essential for effective inheritance tax and succession planning.
Put safeguards in place with lasting powers of attorney
Lasting powers of attorney allow trusted individuals to manage your affairs if you become unable to do so yourself. These are an important part of long-term planning and should not be overlooked.
Talk to family members and business partners early
Clear and open communication can help manage expectations, reduce the risk of disputes, and ensure everyone understands the plans being put in place.
There is still time to act before April 2026, but early advice provides more options and greater control.
A specialist lawyer, working alongside your financial or tax adviser, can help you understand how the APR and BPR changes apply to your circumstances and ensure your plans reflect both your financial position and your family values.
Inheritance tax rules may be changing, but with the right guidance, it is still possible to plan with confidence.
An accredited Lifetime Lawyer specialises in later-life and succession planning and has the expertise to support farming families and business owners through complex inheritance tax issues.
Working with a Lifetime Lawyer can help you to:
- Understand how the April 2026 APR and BPR changes could affect your estate or business
- Review wills, trusts, and succession plans to ensure they remain effective
- Put robust plans in place to protect your family and assets for the future
If you are concerned about inheritance tax or planning for the next generation, professional advice can make a real difference.
Contact Premier Solicitors today for expert advice on inheritance tax, probate, and all aspects of estate planning and administration. Please call us on 01234 358 080 or visit our contact page to send an enquiry form.
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