The Autumn Budget 2024 signalled some significant changes on the way for families, landowners and business owners. From 6 April 2026, the current level of Inheritance Tax (IHT) relief available on agricultural and business assets is expected to be reduced. At the moment, Agricultural Property Relief (APR) and Business Property Relief (BPR) can offer up to 100% relief on qualifying assets. Draft legislation was released in July 2025 that sets out how these changes may take shape.
What’s Changing?
A new £1 million allowance will apply to the combined value of business and agricultural property that currently qualifies for 100% relief under APR and BPR. This allowance will sit alongside your existing IHT nil-rate bands and exemptions.
Once the value of qualifying property exceeds this £1 million allowance, the rate of relief on anything above it is expected to drop to 50%.
This allowance is expected to apply to:
Another important change is to BPR on shares listed on non-recognised stock exchange markets. This would include AIM-listed shares – meaning the current 100% relief for many AIM share portfolios may no longer be available.
The Practical Impact
Imagine someone owns shares in an unquoted trading business worth £2 million. Under the current rules, the entire value may qualify for 100% BPR, so no IHT would arise on these shares.
Under the proposed rules:
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The first £1 million would still benefit from 100% relief
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The remaining £1 million would be relieved at 50%
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This means £500,000 becomes taxable under IHT rules
Their usual £325,000 nil-rate band could be offset, but there may still be a taxable amount left, depending on the rest of their estate.
What This Means for You
These changes could create new exposure to IHT where previously there was none. The key is understanding your position early. That means taking a clear look at:
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The size and type of assets in your estate
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How these assets are structured
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How your Will distributes them
Small adjustments can sometimes make a meaningful difference. Reviewing your Will and estate plans ahead of April 2026 could help maintain relief where possible and reduce avoidable tax.
Next Steps
The rules are still proposals and not yet final. However, building awareness now gives you space to act thoughtfully rather than reactively.
If you hold business interests, farmland, AIM shares, or are planning to gift assets to family or trust arrangements, our team at A&C Chartered Accountants can help you understand what the changes may mean for you and outline your options clearly.