Big Inheritance Tax news for farmers and business owners - 01872 492095 info@cornwallwills.co.uk

Following widespread concern from farmers and business owners, the Government has announced that the Inheritance Tax relief threshold for Agricultural Property Relief (APR) and Business Property Relief (BPR) will increase to £2.5 million. This change is due to take effect from 6 April 2026.

So, what does that actually mean?

Under the new rules, qualifying agricultural or business assets worth up to £2.5 million can be passed on free from inheritance tax. For married couples or civil partners, this allowance can effectively double to £5 million, provided the usual conditions are met. Importantly, this sits on top of the standard nil-rate band and (where applicable) the residence nil-rate band.

Anything above the £2.5 million threshold won’t lose relief entirely, but it will generally receive 50% relief, meaning inheritance tax would be charged at an effective rate of 20% on the excess rather than the full 40%.

This is a significant softening of the original proposals and is clearly aimed at protecting family-run farms and owner-managed businesses, where wealth is often tied up in land, buildings, machinery, or trading assets rather than cash. The Government has acknowledged that without this increase, some families could have been forced to sell assets simply to pay the tax bill.

That said, these reliefs are not automatic. APR and BPR are highly technical areas, and eligibility depends on factors such as how assets are used, ownership periods, business activities, and how everything is structured at the time of death. A will or succession plan that worked well a few years ago may no longer be optimal under the new rules.

With April 2026 on the horizon, now is a sensible time for farmers and business owners to review their wills, succession planning, and overall estate structure to ensure these valuable reliefs are fully protected.

If you own a farm or a family business and want clarity on how these new rules affect you, taking advice early can make all the difference.