Our response to the Government’s consultation on changes to APR and BPR

Significant Inheritance Tax (IHT) changes were announced in the Budget on 30 October 2024.

Most notably, a proposed overhaul of certain IHT reliefs including Agricultural Property Relief (APR) and Business Property Relief (BPR). Further details on this can be found here.

We have made a detailed and comprehensive response on behalf of our clients to the Government’s consultation on proposed changes to Agricultural Property Relief (APR) and Business Property Relief (BPR).

The consultation ended on 23 April 2025 and the government will now consider the responses before publishing draft legislation later in the year. The changes are due to come into force on 6 April 2026. It is likely there won’t be much time between the draft legislation being published and when the legislation comes into effect.

Now is the time to act and consider how the proposals will affect your businesses. Individuals with APR/BPR assets should seek advice and undertake Inheritance Tax planning steps sooner than they would traditionally consider. It will be important to review historic family plans, documentation and structures such as Wills, Trusts and business agreements with these rule changes in mind.

Whilst more clarification on several of the key proposals is expected, we don’t know if any further changes will be announced, or plans rolled back by the government following lobbying by farmers, the wider industry and business groups.

Here are some of the key issues:

• The £1m allowance isn’t transferrable and there is no additional allowance or exemptions if a spouse pre-deceased the Budget. This could cost families £200,000 in additional IHT.  
• There is no indication of any allowance or exemptions for the extraction of profits from businesses to finance the settlement of IHT. This may result in income tax and/or capital gains tax liabilities being incurred in order to facilitate the settlement of the IHT.   
• The lack of any amnesty period or tapered introduction to these rules disproportionately impacts individuals who will die in the years after 6 April 2026.

Get in touch with our team to discuss how the proposed changes may affect you so you can be ready for 6 April 2026.