Some of the more notable changes outlined in the Autumn Budget were those centred on the reduction of Agricultural Property Relief (APR) and Business Property Relief (BPR) under Inheritance Tax (IHT). 

As of April 2026, the new rules will remove the unlimited 100 per cent tax relief on business and agricultural assets. 

In place of the old system, a new £1 million cap on the 100 per cent will be introduced per individual, with any relief exceeding the cap set at 50 per cent.  

The impact on property settled in trust 

Property settled in trust will be the focus of ongoing IHT charges rather than being included in the value of a settlor or beneficiary’s estate on death.  

Changes to the legislation are going to impact the IHT payable on property settled in trusts, where that property qualifies for APR or BPR and exceeds £1 million in value.  

The main relevant property trust charges are:  

• 10-year anniversary charges  

• Exit charges  

In cases where the settled property is fully eligible for the 100 per cent rate of APR or BPR, the value will be reduced to nil, which will combine with a lack of 10-year anniversary charges or exit charges to provide a slight relief. 

The open consultation for the new rules is still ongoing as the Government is attempting to determine the full impact of the proposed changes.  

This consideration extends to questioning how the rules will work in practice for both regular estates and property settled in trust. 

Understanding the consultation questions, and how you can respond 

The consultation questions are: 

1. Are the rules on the application of the £1 million allowance for individuals sufficiently clear for transfers made on or after 6 April 2026? What are your views on this? 
2. Are the rules on the application of the £1 million allowance for 10-year anniversary charges and exit charges sufficiently clear for property settled on or after 6 April 2026? What are your views on this? 
3. What are your views on the proposal to standardise the calculation of Inheritance Tax exit charges, so that all exit charges are calculated based on unrelieved values regardless of whether the exit takes place before or after the first 10-year anniversary? 
4. What are your views on the proposed transitional provisions for qualifying agricultural and business property settled into a relevant property trust before 30 October 2024? 
5. What are your views on the proposed transitional provisions for qualifying agricultural and business property settled into a relevant property trust during the transitional period? 
6. What are your views on introducing a single £1 million allowance for 10-year anniversary charges and exit charges where a settlor has transferred property into multiple trusts on or after 30 October 2024? 
7. What are your views on introducing rules similar to the existing ‘related’ property provisions for Inheritance Tax, so that multiple holdings by the same settlor across multiple trusts can be connected for valuation purposes? 
8. What are your views on the application of the £1 million allowance to special trusts, age 18 to 25 trusts, and QIIP trusts? 
9. Do you have any further views on the application of the £1 million allowance to property that has been settled into trust? 

To respond to the consultation, you should use either the online form or email answers to aprbpr.consult@hmrc.gov.uk by 23 April 2025. 

This may be your best chance to highlight how your estate is likely to be affected by these rules, the full details of which can be found here.  

Post consultation 

There will be some more steps taken after the consultation before the changes become legislation.  

A response will be published by the Government, who will then carry out a technical consultation on draft legislation for the changes to APR and BPR. 

At this point, the details of the changes will become more apparent, ensuring it will be possible to plan and prepare effectively.  

We can help you navigate the new changes and ensure that the maximum amount of wealth is passed to the next generation as per your wishes.  

For further guidance and information on changes to APR and BPR, contact our agriculture specialists today.