In the Autumn Budget 2024, the Chancellor announced plans to limit two key Inheritance Tax (IHT) reliefs – Agricultural Property Relief (APR) and Business Property Relief (BPR) – from 6 April 2026.

At the moment, these reliefs can give up to 100% relief from Inheritance Tax on qualifying agricultural and business assets. Draft legislation for the changes was published in July 2025.

What’s expected to happen

A new £1 million allowance will be introduced. This will apply to the combined value of any agricultural or business property that currently qualifies for 100% relief under APR or BPR.

If the total value of these assets is above £1 million, the rate of relief will drop to 50% on anything above that threshold.

This £1 million allowance will apply to:

• Property included in your estate when you die.
• Lifetime gifts made to individuals within seven years before death.
• Chargeable Lifetime Transfers (CLTs) where there is an immediate lifetime charge (e.g. most transfers into a trust).

There’s also an additional change to BPR: relief will be cut from 100% to 50% on shares that are not listed on recognised stock exchanges, such as AIM shares.

What this means in practice

Let’s take an example.
An individual holds shares in an unlisted trading company worth £2 million.

Current rules: 100% BPR applies – no Inheritance Tax is due on these shares.

Proposed rules (from April 2026): The first £1 million of shares would still get 100% BPR. The next £1 million would only get 50% BPR – so £500,000 of the total value would now be subject to Inheritance Tax. The £325,000 nil-rate band would still be available to offset part of that taxable amount.

What you can do now

You won’t be able to plan properly until you understand what your potential tax exposure might be, so the first step is to get a clear picture of your estate.

That means:

• Estimating your likely IHT liability under the new rules.
• Reviewing your Will and how your assets are distributed.
• Considering whether any adjustments could improve your overall IHT position.

Remember, these are still proposals – the rules haven’t yet become law. It’s sensible to start thinking ahead, but avoid taking major action until the details are confirmed.

If you think these changes could affect you, please get in touch with us to discuss your options.