The Government on 23 December announced a significant and welcome change to its much-criticised proposals relating to Agricultural Property Relief (APR) and Business Property Relief (BPR).
Following sustained pressure from the farming community and family-owned businesses, the Government has confirmed that the proposed lifetime allowance will be increased from £1 million to £2.5 million, with effect from 6 April 2026.
This means that married couples and civil partners will be able to pass on up to £5 million of qualifying agricultural and business assets with 100% relief from inheritance tax (IHT). Assets exceeding this new £5 million threshold will be eligible for tax relief of 50% from inheritance tax.
This announcement represents a dramatic shift from the original proposals, which had caused widespread concern across the rural and family business sectors. The increased allowance will provide greater certainty and flexibility for succession planning and is likely to ease fears of forced asset sales or business fragmentation on death.
However, despite this welcome development, the new regime will still require careful forward planning, particularly for larger estates and businesses with significant non-relievable assets or complex ownership structures. The period leading up to April 2026 presents an important opportunity to review existing wills, partnership arrangements and succession strategies.
Farming estates and family-owned businesses wishing to understand how these changes will affect them, and what steps they should consider taking now, are encouraged to contact our team for tailored advice.
Contact our Private Client Solicitors
If you are in need of advice or assistance on any of the legal issues mentioned in this article, please contact any member of our experienced Private Client team on 020 7631 4141 or email privateclient@bishopandsewell.co.uk
The above is accurate as of 06 January 2026.
The information above may be subject to change.
The content of this note should not be considered legal advice, and each matter should be considered on a case-by-case basis.
