Last year’s Autumn Budget hit business owners hard with the announcements of changes to Agricultural Property Relief (APR) and Business Property Relief (BPR).
The new Inheritance Tax (IHT) rules, set to take effect from April 2026, could create substantial tax liabilities, especially where assets are handed down through generations.
Farmers, business owners and AIM investors are amongst those most affected by these upcoming changes and assessing your estate planning has never been more important.
With further changes to these reliefs announced in the Chancellor’s latest speech, now is the time to prepare.
What changes has the Autumn Budget brought for APR and BPR?
During her speech, the Chancellor confirmed that any unused £1 million allowance for the 100 per cent rate of APR and BPR will be transferable between spouses and civil partners, even if the first death was before 6 April 2026.
This is set to match the relief the transferable IHT nil-rate band offers and eases concerns for families who feared losing part of their relief entitlements.
However, the reforms also mean that any value above the £1 million threshold will still only receive 50 per cent relief.
This will create a 20 per cent IHT charge where the combined thresholds – nil-rate band, residence nil-rate band and APR/BPR – are exceeded. For a couple, this means that they have an effective threshold of up to £3 million.
For some people, this brings a significant change to their estate as business and agricultural assets were commonly held under the assumption they would pass tax-free upon death.
How may these changes affect you?
Many individuals now have limited time to review their Wills or consider whether lifetime gifting might be appropriate to distribute the estate in advance of their passing.
The lack of additional measures means that anyone relying on the traditional approach of passing assets upon death may be at risk of unexpected tax liabilities.
Families dealing with incapacity or outdated Wills may have challenges updating their affairs in time before April 2026.
To protect your family wealth, it is important to seek professional help when assessing how the new APR and BPR limits will affect you.
Our specialist team can advise you on your estate planning options and assess further business assets and partnerships.
Do you want to know if the new APR and BPR changes affect your estate? Speak to our team today.
