The government has announced that the proposed cap to the 100% rates of Agricultural Property Relief (APR) and Business Property Relief (BPR), which is due to apply from 6 April 2026, will be increased to £2.5 million from the £1 million previously announced.
The revised measure means that from 6 April 2026, individuals will be able to pass on £2.5 million of qualifying agricultural and business assets without attracting IHT.
This is the second recent significant amendment to the proposed IHT reforms, which were first announced in the 2024 Autumn Budget. The initial policy did not permit any unused allowance on death to be transferred between spouses or civil partners; however, this position changed in the 2025 Autumn Budget when it was announced that the new allowance would be transferable.
These changes together mean spouses and civil partners will potentially be able to pass on, combined, £5 million of qualifying agricultural and business assets free of tax.
HM Treasury states that as a result of increasing the allowance:
- The number of estates claiming APR (including those also claiming BPR) affected by the reforms in 2026-27 halves from 375 to 185.
- Around 85% of estates claiming APR in 2026-27, including those that also claim for BPR, are forecast to pay no more IHT on their estates.
Useful guides on this topic
IHT Business Property Relief
A guide explaining what Business Property Relief is, when it can apply and pitfalls and planning points.
IHT Agricultural Property Relief
What is Agricultural Property Relief (APR)? When does it apply? What are the conditions and restrictions of the relief?
IHT: Agricultural and Business Property Reliefs, April 2026 changes
Significant changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) were announced in the 2024 Autumn Budget. What is changing? What planning could be considered?
IHT: Residence Nil-Rate Band (RNRB)
What is the Residence Nil-Rate band? When was it introduced? How does it work? Who can claim it?
IHT: Transferable Nil-Rate Band
What is the Transferable Nil-Rate Band for Inheritance Tax? Who does it apply to? How do I claim it?
External link
HM Treasury: Inheritance tax reliefs threshold to rise to £2.5m for farmers and businesses