In an unexpected announcement, the government confirmed a significant change to the planned reforms of agricultural property relief (APR) and business property relief (BPR), which are due to take effect from 6 April 2026.

Under the revised proposals, the full 100% inheritance tax relief will now apply to the first £2.5 million of qualifying assets, an increase from the previously announced £1 million threshold.

As a result, a couple will be able to pass on up to £5 million of agricultural or business assets between them free from inheritance tax, in addition to the standard inheritance tax allowances that already apply.

The proposed changes to inheritance tax treatment for agricultural and business assets were originally announced in the 2024 Autumn Budget. This latest update represents the second amendment to the initial proposals. The first amendment, introduced in the 2025 Autumn Budget, confirmed that the new allowance can be transferred between spouses or civil partners.

HM Treasury has stated that the higher allowance will halve the number of estates affected by the reforms and that approximately 85% of estates will pay no more inheritance tax than they would have done in the absence of the changes.

If you would like tailored advice on how these inheritance tax reforms and the increased allowances may impact your estate, please get in touch. We would be happy to help.

See: https://www.gov.uk/government/news/inheritance-tax-reliefs-threshold-to-rise-to-25m-for-farmers-and-businesses