Agricultural Property Relief Reforms: What Farming Families Need to Know Before April 2026

For many farming families in Cornwall, Agricultural Property Relief (APR) is an essential element of tax and succession planning. APR — or earlier forms of it — has helped ensure that, over the last century family farms have been passed down through the generations intact.  This has allowed small farms in particular to continue operating as viable farming businesses.

Proposed Changes

Under the current law, APR can provide 100% relief from Inheritance Tax on qualifying agricultural land and assets, provided the statutory conditions relating to ownership and agricultural use are met. At present, there is no monetary cap on the amount of APR that can be claimed.

As has been widely reported, the Autumn Budget 2024 announced proposals to cap APR so that 100% relief would be limited to £1 million per person, with agricultural assets above this threshold qualifying for relief at 50% only.

The proposals also extended to Business Property Relief, with the effect that APR and BPR would be brought together under a single combined £1 million allowance.

Subsequent announcements

Following negative press and significant feedback from the farming community, the Government has since announced a number of important modifications to the original proposals:

1. Autumn Budget 2025

   
   

The Chancellor confirmed that the proposed 100% APR/BPR allowance would be transferable between spouses and civil partners, broadly aligning it with the existing transferable nil rate bands. This means that any unused allowance on the first death could be claimed on the second.

2. 23 December 2025 announcement

   
   

The Government announced that the proposed 100% relief allowance would be increased from £1 million to £2.5 million per individual.  This higher figure replaces the earlier £1 million proposal.

As a result, a married couple or civil partners could potentially benefit from up to £5 million of qualifying APR/BPR assets attracting 100% relief, in addition to the usual nil rate bands.

These reforms are intended to take effect from 6 April 2026. However, it is important to note that they are not yet legally in force and remain subject to parliamentary approval and final legislation.

Given the scale of the proposed changes, farming families should review their succession and estate planning well in advance of April 2026 to ensure they are appropriately structured for the new rules.

If you would like to discuss these changes and how they may affect you, please contact Lauren Gillespie or Laura Martin, who will be happy to advise further.

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