The UK government has announced a significant increase in inheritance tax relief thresholds for agricultural and business property, aimed at supporting family farms and trading businesses across the country. From April 2026, the Agricultural Property Relief (APR) and Business Property Relief (BPR) thresholds will rise from £1 million to £2.5 million. This will allow spouses or civil partners to pass on up to £5 million of qualifying assets before inheritance tax becomes due.

Why this change to IHT matters

Inheritance tax changes have been a point of concern for many in the farming and business community, and there have been numerous protests against the changes initially announced in the Autumn 2024 Budget. The Chancellor had changed the relief cap to £1 million, meaning estates with significant agricultural or business assets could face higher tax bills at death.

Announcing the threshold is to be increased to £2.5 million means:

• More family farms and owner-managed businesses will be protected from inheritance tax.
• The number of estates impacted by the reforms is expected to fall significantly.
• Couples can now utilise the transferable relief to shelter up to £5 million in qualifying assets, in addition to existing tax allowances.

This change is part of a broader legislative update to the Finance Bill, scheduled for introduction in January 2026.

What this means for business owners and farmers

For owner-managed businesses and farming families, this increase presents a welcome reprieve in long-term planning. It can:

• Reduce potential inheritance tax liabilities significantly for qualifying estates.
• Provide greater certainty and stability in succession planning.
• Help protect commercial assets that are vital to both local economies and national food production.

That said, this relief does not mean unlimited exemption. Many businesses will own expensive machinery as well as property or land valued above the threshold, so planning remains crucial. Comprehensive advice tailored to your circumstances is essential for optimising tax efficiency and business continuity.

IHT planning tips

If you own business assets or agricultural land, consider:

1. Reviewing your estate plan well before April 2026 to understand how the new thresholds apply.
2. Maximising the transfer of assets between spouses to utilise the full £5 million combined relief.
3. Integrating other reliefs and exemptions, including nil-rate bands and residence-related allowances, into your strategic planning.

Inheritance tax legislation is evolving, and the recent threshold uplift is an opportunity to revisit long-term plans with a trusted advisor who understands both rural and commercial contexts.

At Barnes Roffe, we can help you navigate these changes confidently and make tax-efficient decisions that support both today’s operations and tomorrow’s legacy. Contact us now to assist with your IHT planning.