The Agricultural and Business Property Reliefs threshold will be increased from £1million to £2.5m when it is introduced in April 2026, the government has confirmed.
This allows spouses or civil partners to pass on up to £5million in qualifying agricultural or business assets between them before paying inheritance tax, on top of existing allowances.
Following the reforms to Agricultural and Business Property Reliefs announced at Budget 2024, the government has listened to concerns of the farming community and businesses about the reforms.
Having carefully considered this feedback, the government is going further to protect more farms and businesses, while maintaining the core principle that the most valuable agricultural and business assets should not receive unlimited relief.
Raising the threshold will significantly reduce the number of farms and business owners facing higher inheritance tax bills under the reforms, ensuring that only the largest estates are affected.
Today’s announcement will halve the number of estates claiming Agricultural Property Relief (including those also claiming Business Property Relief) who are affected by the reforms – better targeting the relief.
The number of estates claiming agricultural property relief (including those also claiming business property relief) affected by the reforms in 2026-27 halves from 375 to 185
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GETTY
As a result the number of estates claiming agricultural property relief (including those also claiming business property relief) affected by the reforms in 2026-27 halves from 375 to 185.
Most estates will benefit, with inheritance tax cut by hundreds of thousands of pounds for many families.
The number of estates affected by the reforms claiming only business property relief – excluding those holding only AIM shares – will fall by a third, reducing complexity and ensuring support goes where it’s needed most.
Around 85% of estates claiming agricultural property relief in 2026-27, including those that also claim for business property relief, are forecast to pay no more inheritance tax on their estates.
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Most estates will benefit, with inheritance tax cut by hundreds of thousands of pounds for many families
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X / National Farmers’ Union