Inheritance Tax Reliefs increase to £2.5m for farmers and businesses
In welcome news for many farmers and business owners across the UK, the government has announced that the planned Inheritance Tax threshold for Agricultural Property Relief (APR) and Business Property Relief (BPR) will rise from £1 million to £2.5 million.
From April 2026, individuals will be able to pass on up to £2.5 million of qualifying agricultural or business assets free from Inheritance Tax. For married couples and civil partners, this effectively increases the combined threshold to £5 million.
At face value, this represents a meaningful strengthening of the reliefs that underpin long-term succession planning for family farms and owner-managed businesses. For many, this announcement offers real relief after what has been a difficult and uncertain year.
That said, while the outcome is positive, the path to get here has been anything but smooth. Months of speculation, lobbying and worry have taken their toll. Countless families have been left in limbo, struggling to plan for succession, investment and the long‑term stewardship of their land and businesses.
It’s also important to note that this change doesn’t remove the potential tax charge entirely; it simply reduces the impact for some. Tax planning may still be necessary where steps haven’t yet been taken. Families who have already acted will need to revisit the implications of this increase, and some decisions might have looked different had this higher threshold been known earlier.
The detailed announcement published by HM Treasury provides a framework for the changes, but important technical and practical considerations remain. We’ll now be digesting the detail and provide further clarity and practical guidance to our clients in due course.
With the landscape shifting once again, proactive planning is essential. Contact our team on 01903 234094 to discuss how these updates may affect your farm, your family, and your long‑term goals or to make sure your strategy is still working in your favour.
