Agricultural And Business Property Relief

Your family’s future and changes to business (BPR) and agricultural property relief (APR)

4 min read

06 Feb 2026

Cat among the pigeons

In the 2024 Autumn Budget, the government announced major changes to agricultural property relief (APR) and business property relief (BPR) now known as Business Relief (BR). The headline change was a sharp reduction in the 100% inheritance tax (IHT) relief that these assets once offered.

Some assets, including Alternative Investment Market (AIM) shares, now qualify for only 50% relief. Others are subject to a cap on the value that can still receive full relief.

These changes affect people who use APR and BPR to reduce the IHT due on death. They also change how farming and family businesses are taxed when assets are passed on or gifted during a lifetime. Unsurprisingly, the announcement was a metaphorical cat among the pigeons!

Time to review

The outcome is now less severe than first expected, following later policy changes, which we’ll cover shortly. Even so, anyone using, or thinking about using, APR or BPR as part of their estate planning should review their position.

For many families, these updates come at the same time as wider reforms to non‑dom rules and future changes to how pensions may be taxed on death. Together, this could make business property relief even more relevant in estate planning.

Careful planning matters

To understand the impact, it helps to look at the background. This shows why careful, joined‑up planning is now more important than ever.

Supporting future generations

Until recently, business relief could provide up to 100% IHT relief on the full value of agricultural land and qualifying business interests.

With inheritance tax charged at 40%, these reliefs play a vital role in helping farms and family run businesses pass safely from one generation to the next.

Without them, large IHT bills could arise when assets are gifted or inherited. In some cases, this could mean selling up and threaten the future of the business itself.

Investing in qualifying assets

There’s also a wider planning opportunity. Investors can access these reliefs by investing in assets that qualify for APR or BPR.

If those investments are held for more than two years at the time of death, they could attract the same tax treatment as assets owned directly by the business owner or farmer.

What the changes could mean for you

When the reforms were first announced in 2024, the plan was to cap 100% relief at £1 million from April 2026. This proposal faced strong opposition, including rallies of tractors as farmers protested.

The cap has since been increased to £2.5 million and can now be transferred between spouses.

In practice, this means:

Married couples and civil partners may pass on up to £5 million of qualifying business or agricultural assets free from IHT
Any value above the cap may still benefit from 50% relief
AIM listed shares qualify for 50% relief, reducing the effective IHT rate from 40% to 20%

Time to revisit your estate plans

Given the scale of these changes, it’s a wise time to review your estate plans. Assumptions that once worked might not apply now.

That said, business and agricultural assets, as well as AIM investments, can still play a valuable role in inheritance tax planning when used carefully.

Key questions to consider:

Do you understand your estate’s potential IHT exposure under the new and upcoming rules?
Would it help to bring forward estate planning discussions and decisions?
Have you considered how different planning strategies could work together for a better overall outcome?