In a major u-turn, the chancellor Rachel Reeves has changed the threshold for agricultural and business property relief, raising it to £5m for couples
The allowance for the 100% rate of relief will be set at £2.5m, rather than £1m, with a 50% rate of relief thereafter. This means a couple will be able to pass on up to £5m of agricultural or business assets between them, on top of the existing allowances such as the nil-rate band.
The government estimates that up to 185 estates claiming agricultural property relief, including those also claiming business property relief, are expected to pay more inheritance tax in 2026-27. This means 85% of all estates claiming agricultural property relief in 2026-27, including those that also claim for business property relief, are forecast to not pay any more inheritance tax as a result of the changes. This change will cost an estimated £130m a year.
