Government’s consultation on changes to APR and BPR – what next?

The government’s consultation on its proposed changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) ended on 23 April 2025 and they will now consider the responses over the summer before publishing draft legislation, expected later in the year. We have responded in detail on behalf of our clients with the proposed change in legislation due to come into force on 6 April 2026.

If you haven’t yet considered how these proposals will affect you, then now is the time. They will affect business owners, those with agricultural and land holdings, and could conflict with plans already made to mitigate inheritance tax and succession.

From April 2026 100% inheritance tax (IHT) relief for agricultural and business property is subject to a combined cap of £1 million per taxpayer. This allowance will not be transferable between spouses and therefore could be wasted without careful planning. Above this £1 million cap, relief will only be given at 50%.

Outside of this cap, the IHT relief given on AIM listed shares and other shares not listed on a recognised stock exchange has been reduced from 100% to 50% for transfers chargeable to IHT from April 2026.

These rules apply to lifetime transfers made on or after 30 October 2024 if the donor dies on or after 6 April 2026.

It is important now to review plans for succession, along with the documentation and structures in place such as Wills, Trusts, and shareholdings with the proposed rule changes in mind, to see if they still achieve the goals you have.

It will also be a good idea to obtain an up-to-date valuation of these assets so that the quantum of the issue can be identified. The consequence of these changes and doing nothing is that they could have a significant impact on the IHT payable on your estate.

Whilst more clarification on several of the key proposals is expected, we don’t know if any further changes will be announced, or if plans will be rolled back by the government following lobbying by farmers and other industry and business groups.

Get in touch with our team to review your position to consider if any further IHT planning should be undertaken.