Inheritance Tax Changes 2026: New Rules for APR & BPR
The UK government has announced changes to Inheritance Tax (IHT) reliefs for Agricultural Property Relief (APR) and Business Property Relief (BPR). While these reliefs have long been a basis of succession planning for farmers and business owners, the rules are changing from April 2026.
Quick Refresher: What are APR and BPR?
APR and BPR are long standing IHT reliefs designed to help family farms and trading businesses pass to the next generation without being broken up to pay Tax.
- APR (Agricultural Property Relief) – applies to qualifying agricultural land and buildings.
- BPR (Business Property Relief) - applies to qualifying trading businesses and certain shares.
Under the current system, these assets can often qualify for 100% relief, meaning no Inheritance Tax (IHT) is payable on them at all.
Why this matters: APR and BPR are core tools in farm and business succession planning, helping assets pass to the next generation without being sold to fund IHT.
What’s changing from April 2026?
From April 2026, the UK’s Inheritance Tax reliefs for farms and family businesses are changing.
The first £2.5m (recently increased from the originally announced figure of £1m) of qualifying APR and BPR assets will still receive 100% IHT relief, but anything above this will only qualify for 50% relief, creating a potential 20% tax charge on the excess. The £2.5m allowance will be transferable between spouses, allowing couples to protect up to £5m with planning.
Smaller estates are unlikely to be affected, but larger farms and businesses could face significant new Tax bills.
Practical next steps
Now is the time for those impacted by the changes to review succession and estate plans. Do you need to:
- Change your estate/succession plans in light of the cap?
- Update your Will?
Speak to our Private Client team to discuss your options ahead of the changes in April. Call 0330 0945 500, email info@neves.co.uk or complete our Contact Form and we'll get back to you.
