Business and Agricultural Property Relief

From 6 April 2026, significant changes to Business Property Relief (BPR) and Agricultural Property Relief (APR) will come into effect, changing how these tax reliefs apply to inheritance tax (IHT).

For years, both BPR and APR have offered a lifeline to family businesses and farms, potentially wiping out IHT liability on qualifying assets. Now, the landscape is set to change.

Under the new rules:

• The 100% relief will be capped at £1 million of qualifying assets.
• Any value beyond this threshold will receive just 50% relief, rather than the full exemption

What does this mean for you?

If you have built up substantial business or agricultural assets that would previously have been passed to the next generations free from IHT, these changes could leave your estate facing a considerably higher tax bill. While BPR and APR will remain valuable tools, they will no longer eliminate IHT for estates with qualifying assets above £1 million.

Planning for the future

At Towergate, we’ve seen first-hand the benefits that careful financial planning can have to mitigate the blow of tax changes like these. An effective strategy could be to use life policies written in trust to help cover any potential IHT liability. This approach ensures that funds are available to settle tax obligations without putting financial strain on your estate or beneficiaries. The countdown is on until these changes come into effect.

Further information:

• gov.uk/government/publications/agricultural-property-relief-and-business-property-relief-reforms

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems, we recommend that professional advice be sought.