What the APR and BPR reforms mean for Inheritance Tax planning from April 2026

The Government has announced an important update to the planned reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR), due to take effect from 6 April 2026.

Following feedback from the farming community, family businesses and professional advisers, the Government has confirmed that the amount of qualifying assets eligible for 100% Inheritance Tax (IHT) relief will be significantly increased.

While this is a welcome development, the reforms still represent a major shift from the long-standing rules and forward planning remains essential.

What has changed?

Under the revised proposals:

• The allowance for 100% APR and BPR will increase from £1 million to £2.5 million per individual. This means that a couple will be able to pass on up to £5 million of qualifying agricultural or business assets at 100% relief between them.
• This allowance sits in addition to existing IHT allowances, such as the nil rate band.
• The trust relief allowance will also increase from £1 million to £2.5 million, in line with the personal allowance.
• The Government has confirmed that these changes will be included in amendments to the Finance Bill.

For many farmers and business owners, this increase will provide reassurance and reduce the potential exposure to IHT compared to the original proposals.

What remains unchanged?

Despite the increased allowance, several key aspects of the reforms will still apply from April 2026:

• Assets qualifying for APR or BPR above the £2.5 million allowance will receive only 50% relief, meaning part of the value may still be subject to IHT.
• Shares listed on markets that are not recognised stock exchanges, including AIM, will continue to receive 50% relief, regardless of value.
• Trusts holding qualifying agricultural or business assets may face new IHT charges, where relief was previously available.

These changes mean that some estates that were previously fully protected may still face an IHT liability without careful planning.

What should you do next?

Every estate and business structure is different. The impact of these reforms will depend on the value and nature of your assets, how they are owned, and how they are intended to pass to the next generation.

With just a few months to go before the changes take effect, it is essential to review existing arrangements and, where appropriate, put plans in place to protect your position.

At Hall Morrice, we work closely with farmers, business owners and families to provide clarity, confidence and practical advice that goes beyond compliance.

If you would like to discuss how these changes affect you, our specialist tax team would be happy to help.

To arrange a review, please contact our tax team at tax@hall-morrice.co.uk

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