The government has confirmed that the previously proposed cap on 100% rates of Agricultural Property Relief (APR) and Business Property Relief (BPR), due to take effect from 6 April 2026, will now be increased to £2.5 million, up from the £1 million initially announced.

This means that from 6 April 2026, individuals will be able to pass on £2.5 million of qualifying agricultural and business assets without incurring Inheritance Tax (IHT).

This marks the second major revision to the proposed IHT reforms, first announced in the 2024 Autumn Budget. Initially, any unused allowance could not be transferred between spouses or civil partners. However, in the 2025 Autumn Budget it was confirmed that the allowance would be transferable.

Together, these changes mean that spouses and civil partners may now be able to pass on a combined £5 million of qualifying agricultural and business assets free of tax.