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Changes to APR and BPR

APR currently allows a person to pass on the agricultural value of some property in the UK free of IHT. This includes land or pasture used to grow crops or rear animals and farm buildings where all of the conditions are met. 

Assets that may qualify for BPR include: a business or an interest in a business; land, buildings or machinery used in a business; and shares in an unlisted company. Where BPR is available, the value of an asset can be reduced by 50% or 100% when working out the IHT due. 

However, at the Budget, it was announced that the government will reform APR and BPR from 6 April 2026. The 100% rate of relief will continue for the first £1m of combined agricultural and business property, falling to 50% thereafter. The rate of BPR will also fall to 50% in all circumstances for shares designated as “not listed” on the markets of recognised stock exchanges, such as AIM. 

Assets that currently only qualify for 50% BPR will not use up the £1m allowance.

The £1m allowance will also apply to trusts. In addition, the new rules will apply to lifetime transfers on or after 30 October 2024 where the donor dies on or after 6 April 2026.