If you own a business or agricultural land, the last few months have probably felt unsettled. The proposed changes to Inheritance Tax (IHT) reliefs created real concern for many family businesses and farming families who rely on Agricultural Property Relief (APR) and Business Property Relief (BPR) to pass assets down the generations.
There is now some much-needed good news.
What has changed?
The government has confirmed that the cap on 100% relief for APR and BPR – due to take effect from 6 April 2026 – will be increased from £1 million to £2.5 million per individual.
In practical terms, this means you will be able to pass on up to £2.5 million of qualifying business or agricultural assets free from IHT from that date. Anything above this amount will still attract IHT, but at least the starting point is now significantly more generous than originally proposed.
A second important improvement
This is not the only positive adjustment.
When the reforms were first announced in the 2024 Autumn Budget, the new £1 million allowance was not going to be transferable between spouses or civil partners. That would have limited family planning options and, in many cases, increased the eventual tax bill.
The government reversed this position in the 2025 Autumn Budget, confirming that the allowance will be transferable between spouses and civil partners.
What does this mean for you?
Taken together, these changes mean that couples could potentially pass on up to £5 million of qualifying agricultural and business assets free of IHT from April 2026.
For many family-owned businesses and farms, this is a significant relief and removes a lot of the immediate pressure that followed the original proposals.
What should you do now?
This is a welcome development, but it does not mean planning is no longer needed. The rules around what qualifies for APR and BPR can be complex, and ownership structures, wills, and succession plans still need to be reviewed.