A little Christmas relief...

After months of uncertainty, lobbying and very vocal campaigning from farmers and business owners, there is finally some genuinely good news to share. In December 2025, HM Revenue & Customs confirmed a welcome improvement to the proposed changes to Agricultural Property Relief (APR) and Business Property Relief (BPR), following widespread concern about the original plans. The result does not go as far as some would hope but is better than expected and one that will come as a relief to many families planning for the future.

Under the revised rules, individuals will now be able to pass on up to £2.5 million of qualifying agricultural and business assets with 100% inheritance tax relief. This is a significant increase on the original proposals and represents a clear response to the sustained pressure placed on the government by the farming community and family business groups. For many affected, this means that the reliefs they have relied on for years will continue to protect a substantial part of their estate.

The good news improves further for married couples and civil partners. Any unused part of the £2.5 million allowance can be transferred to a surviving spouse or civil partner. In practical terms, this means that up to £5 million of qualifying agricultural and business property could be passed on with full inheritance tax relief between a couple, assuming the conditions are met. This flexibility restores a level of certainty that many families feared had been lost.

Assets above these limits will receive relief at 50%. The increased allowance significantly softens the impact for the vast majority of farms and family-owned businesses. The revised structure strikes a better balance between raising tax revenue and recognising the importance of keeping working farms and trading businesses intact for future generations.

There is also reassurance on the practical side. Where inheritance tax does become payable, the option to spread payments over up to ten years remains available for assets qualifying for APR and BPR. This continues to provide important breathing space and helps avoid the need for rushed asset sales at what is often already a difficult time.

Overall, this announcement represents a positive turning point after months of concern and campaigning. While some planning will still be needed ahead of the April 2026 start date, the increased allowance is very welcome news and shows that collective voices have been heard.

Now is a good time to review succession plans with a clearer and more optimistic picture of how APR and BPR will work going forward. If this is an area that you need reviewing then get in touch with us and our IHT tax expert Claire can assist you.