There’s been plenty said recently about changes to Business Property Relief (BPR). What’s had far less attention is that Agricultural Property Relief (APR) is changing at the same time, and in the same way. From 6 April 2026, both reliefs will be capped, and for families with long-established businesses or farms, this marks a genuine shift in how inheritance tax will apply.
If you own a farm, run a family business, or you’re likely to inherit one, this is worth understanding now, while there’s still time to plan.
What is Business Property Relief and Agricultural Property Relief?
For years, BPR and APR have worked as something close to a safety net for family businesses and farming estates. The general understanding was straightforward: if assets qualified for the relief, they could pass on death without triggering a significant inheritance tax charge. That assumption has shaped how many families structure their affairs, often for decades.
What’s changing is not that the reliefs disappear. What’s changing is that they’re no longer unlimited.
What is Changing from April 2026?
From 6 April 2026, full relief will apply only up to £2.5 million per person. Anything above that threshold will receive partial relief instead, meaning a tax exposure begins to appear where previously there may have been none.
For couples, the position can still be managed more efficiently than for an individual, but even then, larger estates are far more likely to feel the impact.
Does the £2.5 million threshold apply per person or per couple?
The £2.5 million cap applies per person, not per couple. This means couples with jointly held or combined business and agricultural assets may still have more flexibility to plan around the threshold than a single estate holder would. Larger combined estates will still feel the effect.
Why is This Especially Difficult for Farms and Family Businesses?
The tax itself isn’t always the hardest part. It’s how that tax gets paid.
Many family businesses and farming estates are valuable on paper but don’t hold large amounts of liquid cash. Land, shares in a company, or operational assets often make up the bulk of the estate. If a tax bill arises in those circumstances, families can find themselves having to make uncomfortable decisions; selling part of the business, disposing of land, or restructuring at exactly the time when stability matters most.
This is especially true where assets are intertwined. It’s increasingly common for families to hold a mix of trading businesses and agricultural land, sometimes across different structures. In those cases, both BPR and APR may apply, and now both are subject to the same cap. The combined effect can be easy to underestimate until it’s carefully reviewed.
Will I have to sell part of my farm or business to pay inheritance tax?
Not necessarily, but it’s a real risk if the estate doesn’t hold enough liquid cash to cover a tax bill above the new threshold. This is exactly why reviewing how any future liability would be funded, rather than assuming relief will cover it entirely, has become a more important part of succession planning.
Why Timing Matters More Than Ever
What we’re already seeing is that the real risk lies in leaving things too late.
Once someone has passed away, the scope for Inheritance Tax planning is significantly reduced. Options that may have been available during someone’s lifetime, reorganising ownership, making gifts, or simply putting the right structures in place, are no longer on the table. At that point, the focus shifts from planning to managing consequences.
That’s why this change is less about alarm and more about timing.
What should I do to prepare for the BPR and APR changes?
For most people, the right first step is simply to revisit what’s already in place. That might mean:
- Looking again at a Will drafted some years ago;
- Reviewing whether the current ownership of business or land assets still makes sense under the new thresholds; and/or
- Thinking ahead about how any future tax liability would actually be funded, rather than assuming relief will cover it entirely.
A Shift in Mindset, Not Just in The Rules
Perhaps the biggest shift here is one of mindset. BPR and APR are still extremely valuable reliefs, but they’re no longer something that can be relied on without question. They now require a bit more attention, more regular review, and in some cases, earlier conversations than families might be used to having.
For families with businesses or farms, this is one of those changes that’s easy to overlook in the short term but can have a very real impact later on.
Frequently Asked Questions
What is the BPR and APR cap from April 2026?
From 6 April 2026, full Business Property Relief and Agricultural Property Relief will apply only up to £2.5 million per person, with partial relief available above that threshold.
Does APR change in the same way as BPR?
Yes. Agricultural Property Relief is changing at the same time and in the same way as Business Property Relief, with the same £2.5 million per person threshold applying to both.
Can both BPR and APR apply to the same estate?
Yes. Where a family holds both a trading business and agricultural land, both reliefs may apply but from April 2026, they are subject to the same combined cap, so the effect can be larger than expected if not reviewed together.
Is it too early to review my Will and succession plan?
No. Planning options are far more limited after someone has passed away, so reviewing an existing Will and current ownership structures in good time is one of the most effective steps a family can take.
How Lyons Bowe Can Help
At Lyons Bowe, we work closely with business owners, farming families and individuals to make sure their planning keeps pace with changes like this. Whether that’s reviewing an existing Will, looking at succession plans, or simply sense-checking your current position, we aim to keep things clear, structured and tailored to you.
If you think these changes might affect your family, farm or business, or you’re not quite sure it’s well worth having that conversation sooner rather than later. Our Wills & Probate team can talk you through what the new thresholds mean for your specific circumstances and help you put the right plan in place.
