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View all peoplePublished by Jo White on 26 November 2025
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The Autumn Budget brought no substantive changes to the proposed reforms of Agricultural Property Relief (APR) and Business Property Relief (BPR) that are due to come into effect from 6 April 2026. But there was a small piece of good news for families planning their estates.
Under the new regime, 100% relief will remain available on qualifying business and agricultural assets up to £1 million per person, with any excess attracting only 50% relief. As originally announced, the £1 million allowance was not going to be transferable between spouses.
However, the Chancellor announced a helpful concession with any unused portion of the £1 million allowance being transferable between spouses and civil partners, mirroring the treatment of the Nil Rate Band and Residence Nil Rate Band.
Whilst this does not increase the overall relief available to a married couple, it ensures that allowances unused on first death are preserved, avoiding the risk of the allowance being lost without careful will drafting.
Importantly, the transferability will apply even where the first death occurs before 6 April 2026, offering reassurance for families who have already experienced a bereavement.
Despite these changes, the need for inheritance tax planning for individuals holding business and agricultural assets will still be important.
For some, their estate could be subject to a significant increase in inheritance tax being payable due to the cap on the 100% relief. With the rule changes applying from 6 April 2026 working with your advisor now, to understand the opportunities available under the current rules, is vital to ensure wealth is preserved for the future.
If the Budget has raised any questions for you, book your place on our question time webinar this Friday at 9:30am. Alternatively, if you would like any further information or guidance on this topic, get in touch with your usual Kreston Reeves contact or contact us here.
What is the new £1 million APR/BPR allowance introduced by the Autumn Budget 2025?From 6 April 2026, relief under APR and BPR will continue to be available, but will be capped at 100% for the first £1 million of qualifying business or agricultural assets. Any qualifying assets above that £1 million threshold will attract only 50% relief.
Is the £1 million APR/BPR allowance transferable between spouses or civil partners?Yes, under the 2025 Budget the government has confirmed that any unused portion of the £1 million allowance will be transferable between spouses and civil partners on first death. That means if the first spouse to die has not used all their allowance, the remainder can be applied by the surviving spouse or partner.
Does the transferability of the allowance apply even if the first death happened before 6 April 2026?Yes, the new transferability concession applies even where the first death occurs before 6 April 2026. This offers reassurance to families who have already experienced a bereavement, ensuring that unused allowance is preserved.
Will the cap on 100% relief under APR/BPR increase the risk of future inheritance tax liabilities for business owners and farmers?Yes, for individuals holding qualifying business or agricultural assets above the £1 million allowance, the reduction of relief from 100% to 50% on the excess value could result in a significantly higher inheritance tax liability. As a result, IHT planning will remain crucial for many.
What should asset holders do now to prepare for the introduction of the new APR/BPR rules in April 2026?Contact Kreston Reeves today and our team can help assess whether your structure of ownership, wills, and other arrangements need updating to reflect the new allowance and transferability rules. Early planning may help to preserve relief and reduce future IHT exposure.
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