
The recent Budget has introduced updates to Agricultural Property Relief (APR) and Business Property Relief (BPR) under Inheritance Tax (IHT), aiming to protect family businesses while increasing contributions from wealthier estates.
These changes, set to take effect from April 2026, could have far-reaching implications for families, farms, and businesses, so it is important to prepare now.
Changes to APR and BPR relief caps
From April 2026, the full 100 per cent relief on agricultural and business assets will be capped at £1 million, with any value above this threshold qualifying for only 50 per cent relief.
Sunil Ghela, Tax Senior at Grunberg & Co, explains: “Families with large farming operations or high-value businesses will feel the impact of this cap. The £1 million limit sounds generous, but the value of land, equipment, and property can quickly surpass this figure. Reviewing how your assets are structured and held could help reduce the overall tax burden.”
For shares not listed on recognised stock exchanges, such as AIM, the relief will drop to 50 per cent across the board.
Sunil adds: “This is a big change for investors using AIM-listed shares as part of their estate planning. If you hold these shares, now is the time to revisit your portfolio and gifting shares to family, or exploring trusts to reduce the taxable value of your estate. Reviewing how these shares fit into your wider financial plan is also key.”
Instalment payments for other assets
From April 2026, Inheritance Tax on assets not covered by APR or BPR will need to be paid in 10 equal instalments.
While this is intended to ease financial pressures, families may still find it challenging if they have not planned ahead.
Sunil advises: “Spreading the tax bill over 10 years sounds helpful, but it is important to assess how much cash is readily available in your estate. For example, property-rich but cash-poor estates could struggle to cover these payments. Liquidity planning by having a mix of assets that can be easily converted to cash will make this much easier.” N.B. HMRC allow for payment of IHT by instalments, but interest will accrue on outstanding balance and will have to be paid if property is
These changes allow you to reassess your plans and ensure your family is well-prepared.
With the right advice, you can protect your legacy and reduce the impact of IHT on your assets.
Sustainable farming gets a boost
From April 2025, agricultural relief will extend to include land managed under environmental agreements.
This change aligns with the Government’s push for more sustainable practices and allows families to benefit from relief while adopting eco-friendly land management.
Sunil observes: “This is a positive step for farmers already participating in schemes like rewilding or biodiversity projects. If you are not yet involved in these initiatives, it might be worth exploring whether making these changes could provide tax advantages alongside environmental benefits.”
Contact us to discuss your estate and explore tailored strategies to maximise the available reliefs.