Sweeping changes to agricultural property relief will see a cap on 100% inheritance tax reliefs, requiring an immediate review of ownership, lifetime gifting and tax liability for farm owners, explains Julie Butler FCA, founding director of Butler & Co Alresford
As spring approaches (with hopefully a break in the rain), farms must ensure they are undertaking tax planning, legal housekeeping and a review of their succession strategies following changes announced for inheritance tax (IHT).
On 23 December 2025, less than a month after the November Budget, the government announced that the cap for 100% relief would be increased from £1m to £2.5m per individual from 6 April 2026.
This, combined with the allowance now being transferable, means married couples can shelter up to £5m of assets qualifying for 100% agricultural property relief (APR) and business property relief (BPR), with 50% relief applying above that threshold.
These changes are widely regarded to be a significant concession by the government. They were framed as targeting relief better while protecting ‘ordinary family farms’ and will be legislated in a Finance Bill amendment.
I
