What are the main APR and BPR changes from April 2026?

From 6 April 2026, Agricultural Property Relief (APR) and Business Property Relief (BPR) are subject to new limits. The changes restrict the amount of qualifying agricultural and business property that can receive relief at 100%.

What is the new APR and BPR allowance?

A combined £2.5 million allowance applies to qualifying agricultural and business property that would otherwise receive 100% relief. Qualifying value within the available allowance can receive 100% relief, subject to the normal conditions.

What happens when agricultural or business property exceeds £2.5 million?

Qualifying value above the available £2.5 million APR and BPR allowance generally receives relief at 50% rather than 100%. This means larger estates may face an increased Inheritance Tax liability.

Can unused APR and BPR allowance transfer between spouses?

Yes. Under the rules applying from 6 April 2026, unused allowance can generally be transferred between spouses and civil partners. This can potentially increase the allowance available on the surviving spouse or civil partner’s estate.

Have the Business Property Relief eligibility rules changed?

Businesses must still satisfy the normal Business Property Relief conditions. In particular, businesses consisting wholly or mainly of making or holding investments generally do not qualify simply because they are commercially operated.

How are AIM shares affected by the BPR changes?

From 6 April 2026, qualifying shares admitted to trading on markets such as AIM generally receive 50% Business Relief. They are treated separately from qualifying property using the £2.5 million 100% relief allowance.

Can an accountant help with the APR and BPR changes?

Yes. An accountant can value relevant assets, review APR and BPR eligibility, assess how the APR and BPR changes affect potential Inheritance Tax and consider succession or estate-planning options before ownership is transferred.

APR and BPR changes 2026: new Inheritance Tax relief rules

The APR and BPR changes that took effect from 6 April 2026 significantly changed how Agricultural Property Relief (APR) and Business Property Relief (BPR) protect qualifying assets from Inheritance Tax (IHT). Farmers, landowners and business owners can no longer assume that all qualifying agricultural or business property will automatically receive relief at 100%. Under the new rules, an individual generally has a £2.5 million combined allowance for agricultural and business property that would otherwise qualify for 100% relief. Qualifying value above the available allowance normally receives relief at 50% instead. These Inheritance Tax relief changes make succession planning more important for families whose farms, companies or business interests are worth more than the new allowance. These reliefs sit within the wider Inheritance Tax and estate planning framework explained in our ultimate guide to personal tax in the UK. Ownership structure, previous lifetime gifts, spouse or civil partner allowances and the type of assets held can all affect the final IHT position. This guide explains the main Agricultural Property Relief changes and Business Property Relief changes, how the new combined allowance works and what owners should review following the APR and BPR 2026 reforms.

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What changed to Agricultural and Business Property Relief?

APR and BPR continue to reduce the value of qualifying agricultural and business property for Inheritance Tax purposes. The major change from 6 April 2026 is that relief at 100% is now subject to a combined monetary allowance. For an individual, up to £2.5 million of qualifying agricultural and business property can generally receive relief at 100% where all normal qualifying conditions are satisfied. Any qualifying value above the available allowance normally receives relief at 50%. The £2.5 million allowance applies across APR and BPR together. It is not a separate £2.5 million allowance for agricultural property and another £2.5 million allowance for business property. Full details of the reforms are set out in HMRC’s official guidance on the Agricultural Property Relief and Business Property Relief changes.

The new £2.5 million 100% relief allowance

The new allowance is important for estates containing farms, trading businesses or a mixture of qualifying agricultural and business assets. For example, an individual might own:

£1.5 million of agricultural property qualifying for 100% APR; and
£1 million of business property qualifying for 100% BPR.

The combined qualifying value is £2.5 million. Assuming the individual has their full allowance available and all other conditions are satisfied, that property could receive relief at 100%. If the combined qualifying value were £4 million, only £2.5 million would normally fall within the 100% relief allowance. The remaining £1.5 million of qualifying property would generally receive relief at 50%.

What happens to qualifying assets above £2.5 million?

Property above the available 100% relief allowance does not automatically lose APR or BPR completely. Instead, qualifying value above the allowance generally receives relief at 50%. This means only half of that value remains chargeable before considering other available IHT allowances, exemptions or reliefs. For example, if an individual has £3.5 million of qualifying property and their full £2.5 million allowance is available:

£2.5 million may receive 100% relief.
The remaining £1 million may receive 50% relief.
£500,000 would therefore remain after applying APR or BPR to that excess value.

The eventual Inheritance Tax calculation depends on the wider estate, so the amount remaining after APR or BPR should not automatically be treated as the final tax liability.

How the combined APR and BPR allowance works

A key feature of the APR and BPR changes is that the £2.5 million allowance is shared between qualifying agricultural and business property. This matters particularly where an estate contains several different qualifying assets, such as farmland, a trading partnership interest and shares in a family company. The available allowance can be apportioned across qualifying assets. Owners therefore need an accurate understanding of:

Which assets qualify for APR.
Which assets qualify for BPR.
Which rate of relief would otherwise apply.
The market value of each qualifying asset.
Any lifetime transfers that may already have used part of the allowance.

Accurate valuations become particularly important where the combined qualifying value is close to or above £2.5 million.

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Transferring unused allowance between spouses

Unused 100% APR and BPR allowance can transfer between spouses and civil partners. Where the first spouse or civil partner dies without using all of their available allowance, the unused percentage may increase the allowance available to the surviving spouse or civil partner’s estate. Where the full allowance remains unused, this can potentially give the survivor up to £5 million of qualifying agricultural and business property eligible for 100% relief, based on two £2.5 million allowances. The transferred amount is based on the unused proportion of the first person’s allowance, so previous lifetime gifts and qualifying transfers should be reviewed carefully.

Changes affecting AIM and other qualifying shares

One of the important Business Property Relief changes affects certain shares traded on recognised stock exchanges that are treated as not listed for these purposes, including qualifying AIM shares. From 6 April 2026, these holdings generally receive Business Relief at 50% rather than 100%. This 50% category is treated separately from qualifying property that can use the £2.5 million 100% relief allowance. Investors who previously relied on 100% Business Relief for qualifying AIM portfolios should therefore review their estate planning assumptions.

APR and BPR changes for lifetime gifts

The reforms can also affect qualifying agricultural or business property given away during a person’s lifetime. For deaths on or after 6 April 2026, qualifying gifts made on or after 30 October 2024 can potentially use part of the £2.5 million 100% relief allowance where the donor dies within seven years of the transfer. This means owners considering lifetime succession should not assume that gifting agricultural or business assets before death automatically avoids the new allowance rules. The date of the gift, survival period and amount of allowance previously used all need to be reviewed when calculating the position.

Changes affecting trusts

Trusts holding agricultural or business property are also affected by the reforms. The rules for trusts are more complex because separate allowance provisions can apply depending on when property was settled, the identity of the settlor and when relevant trust charges arise. Families using a discretionary trust to hold farmland or business interests should review these charges particularly carefully, since flexibility over beneficiaries can affect the timing of relief. Trustees may need to consider the new rules when dealing with:

Transfers of qualifying property into trust.
Ten-year anniversary charges.
Assets leaving a relevant property trust.
Settlements created during the transitional period.

Existing trusts containing farms or family business interests should therefore be reviewed under the post-April 2026 rules rather than relying on historic assumptions about 100% relief. This is also a good opportunity to confirm whether you need to register trusts with HMRC, since this remains a separate ongoing obligation.

Get Clarity on the New APR Rules

Interest-free instalments for qualifying property

The reforms also extend the ability to pay qualifying Inheritance Tax liabilities by instalments. Where tax becomes payable on property eligible for Agricultural Property Relief or Business Property Relief, the rules can allow the liability to be paid in 10 equal annual instalments without interest, subject to the relevant conditions. This does not remove the tax charge, but it may reduce immediate cash-flow pressure where a farm or trading business would otherwise need to raise substantial funds shortly after a death.

What farmers and business owners should review now

The APR and BPR 2026 rules make it important to understand the current value and structure of qualifying assets before a succession event occurs. Owners should consider reviewing:

The current market value of agricultural and business property.
Whether each asset still satisfies APR or BPR eligibility requirements.
How much of the £2.5 million allowance may be available.
Any unused allowance potentially transferable from a deceased spouse or civil partner.
Lifetime gifts made on or after 30 October 2024.
AIM or other shareholdings now limited to 50% relief.
Trusts holding agricultural or business property.
How any future IHT liability could be funded.

Where trusts are involved, the interaction between Capital Gains Tax and trusts should be reviewed alongside these Inheritance Tax changes rather than in isolation. For estates containing both agricultural and business interests, the combined nature of the allowance makes it particularly important to look at the whole estate rather than reviewing each asset in isolation.

Common mistakes after the APR and BPR changes

Common misunderstandings include:

Assuming all qualifying agricultural or business property still receives unlimited 100% relief.
Treating APR and BPR as having separate £2.5 million allowances.
Assuming qualifying value above £2.5 million receives no relief at all.
Ignoring the ability to transfer unused allowance between spouses and civil partners.
Assuming qualifying AIM shares continue to receive 100% Business Relief.
Ignoring lifetime gifts made during the transitional period.
Failing to review agricultural or business assets already held in trust.

These mistakes can produce very different Inheritance Tax estimates from the amount ultimately payable.

Key takeaways

The most important APR and BPR changes from 6 April 2026 are the introduction of a £2.5 million combined allowance for qualifying agricultural and business property receiving relief at 100% and the application of 50% relief to qualifying value above the available allowance. Unused allowance can potentially transfer between spouses and civil partners, while certain shares such as qualifying AIM holdings now generally receive Business Relief at 50%. Lifetime gifts, trusts and succession structures can also interact with the new rules. Farmers, landowners and business owners should therefore review existing succession plans against the current Agricultural Property Relief changes and Business Property Relief changes. Accurate valuations, clear ownership records and an understanding of how the £2.5 million allowance is being used can help families prepare for the practical impact of the new Inheritance Tax framework.

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Case Study: Reassessing a Family Succession Plan After the APR and BPR Changes

Andrew approached our Fulham Boradway office because his existing succession plan had been prepared when he expected qualifying agricultural and business assets to receive 100% Inheritance Tax relief. His family owned farmland alongside shares in a trading company, with the combined value of the qualifying assets exceeding £2.5 million.

Cigma Accounting reviewed the structure and current value of the agricultural and business interests. We explained that, under the APR and BPR changes from 6 April 2026, the £2.5 million allowance for 100% relief is shared between qualifying Agricultural Property Relief and Business Property Relief assets rather than applying separately to each category.

The review showed why updated valuations were important. Qualifying value within Andrew’s available allowance could potentially receive 100% relief, while qualifying value above it would generally receive 50% relief. We also considered whether any unused allowance from a deceased spouse or civil partner could be available and reviewed previous lifetime transfers that could affect the overall position.

As part of the wider succession work, Cigma Accounting considered the family’s business accounts, Corporation Tax, agricultural asset valuations and Inheritance Tax planning. We also discussed the importance of reviewing how any resulting IHT liability could be funded without unnecessarily disrupting the farm or trading business.