APR and BPR are valuable inheritance tax (IHT) reliefs that can reduce or even eliminate tax on farms and trading businesses passed on after death. They are designed to protect family-owned agricultural land and active businesses from having to be sold to pay an IHT bill.

At Autumn Budget 2024, plans were unveiled to significantly curtail APR and BPR from 6 April 2026. Under the original proposals, the 100% IHT relief currently enjoyed on unlimited business and agricultural assets would have been limited to the first £1m of assets, with the remainder attracting 50% relief. This would have resulted in an effective tax rate of 20% on assets above the threshold that would previously have been inherited tax free.

In response to strong opposition from businesses and the farming industry the Government has announced a relaxation of the plans, increasing the allowance from £1m to £2.5m of combined qualifying business and agricultural assets.

This follows easements announced at Budget 2025 confirming that the original £1m allowance would be transferable between spouses and civil partners. The increase to the threshold means that a surviving spouse or civil partner will now be able to pass on up to £5m of qualifying agricultural and business assets tax-free, on top of existing nil‑rate bands.  This will also apply to individuals who were widowed before the policy was introduced.

Contact us to explore how these changes could affect your succession planning arrangements.