The Autumn Budget outlined changes to Agricultural Property Relief (APR) and Business Property Relief (BPR), which will come into effect from 6^th April 2026, and will impact farmers and landowners across the country. Here’s what you need to be aware of.

What is Agricultural Property Relief?

Agricultural Property Relief (APR) is a type of Inheritance Tax relief and reduces the amount of tax that farmers and landowners must pay when farmland is passed down to the next generation. This is slightly different to Business Property Relief (BPR), which is for business assets as part of the estate.

Reductions to APR and BPR

This relief is currently available on agricultural land and certain business assets (such as private trading company shares or interests in trading partnerships), subject to qualifying criteria, with 100% relief available.

However, from 6^th April 2026, that 100% relief will only be available on the first £1 million of combined agricultural and business assets (excluding those which only qualify for 50% relief, such as qualifying AIM shares), with anything over that £1 million threshold only eligible for 50% relief.

This will have a significant impact on both farmers and business owners. Careful consideration needs to be taken when planning ahead and it’s worth noting that the way this relief will apply to trusts gives certain planning opportunities which can only be taken advantage of until April 2026.

Who will be affected?

Farmers and landowners looking to pass their assets down to their inheritors will likely see the biggest impact of anyone, though other groups may also be affected.

How does this affect alternative ways of passing on farmland?

Full exemptions for transfers between spouses and civil partners still apply, meaning any agricultural and business assets left to a spouse or civil partner will be tax-free.

Following the death of a surviving spouse, an estate can pass on £1 million free of Inheritance Tax as long as they leave their residence to their direct descendants.

Any transfers to individuals more than seven years before death will fall fully outside the scope of Inheritance Tax, with the rate tapering down from 3 years after the transfer, as broken down below.

• 3-4 years before death = 16% IHT
• 4-5 years before death = 12% IHT
• 5-6 years before death = 8% IHT
• 6-7 years before death = 4% IHT

What other funding is available?

The Chancellor also announced £5 billion to help farmers sustain food production over the next two years. This is alongside £60 million for the Farming Recovery Fund which aims to help farmers recover from the impact of flooding.

On this the government says, “We are also investing £208 million in protecting the nation from outbreaks of serious diseases that threaten our farming industry, food security and human health.”

DISCLAIMER: The information and opinions expressed in this article does not address individual requirements and is for informational purposes only. It does not constitute any form of legal advice and should not be relied on or treated as a substitute for specific advice relevant to your particular circumstances.