A significant change has been announced to the proposed reforms for Business Property Relief (BPR) and Agricultural Property Relief (APR). Following sustained campaigning by the farming community, the government has confirmed an increase to the new allowance, providing greater scope for relief on qualifying assets.
BPR and APR Changes – Background
Under the current regime, certain business and agricultural property can qualify for BPR and APR at 100% of its value, with no upper limit on the amount of property that can benefit from full relief.
In October 2024, it was announced that, from 6 April 2026, the 100% rate would be capped at the first £1 million of combined agricultural and business assets. Any value above £1 million would attract relief at 50%. Initially, the allowance was not to be transferable between spouses or civil partners. However, in November 2025, the government confirmed that the allowance would become transferable, including where the first death occurs before 6 April 2026.
Increase to 2.5 Million
The government has now announced that the value of the allowance will rise from £1 million per person to £2.5 million. This increase will take effect from 6 April 2026, coinciding with the introduction of the cap.
With the combination of this higher allowance and the ability to transfer between spouses and civil partners, couples may now benefit from up to £5 million of 100% relief on qualifying assets.
While the introduction of the cap from April 2026 still requires careful planning, the higher threshold gives clients greater scope to maintain 100% relief on substantial qualifying assets. It is advisable for clients to review ownership structures, wills, and any planned lifetime transfers ahead of the changes to ensure relief is maximised.
Conclusion
Today’s announcement strikes a more balanced position for BPR and APR. There are still areas of the new allowance which are uncertain and could do with further clarification, but the increase to a £2.5 million allowance, alongside transferability, represents a significant improvement for those affected by the BPR and APR reforms.
