The Facts: Changes to Business Property Relief and Agricultural Property Relief

Author(s):

Understanding the evolving rules around Business Property Relief (BPR) and Agricultural Property Relief (APR) is essential for effective estate planning. Below, we outline the current rules and the proposed changes coming into effect on 6 April 2026.

Current APR and BPR rules (valid until 5 April 2026)

The current rules for these reliefs are as follows:

Business Property Relief (BPR):

  • Relief is available at 100 per cent on the value of:
    • A business or an interest in a business
    • A holding of unquoted trading company shares
    • A controlling interest in a quoted trading company
    • Land, buildings, machinery, and plant used in the business/company
  • Assets must be held and used appropriately for at least two years to qualify.

Agricultural Property Relief (APR):

  • Relief is available at 100 per cent on the agricultural value of property used for farming purposes.
  • Qualification criteria:
    • The property must have been used in the owner’s business for two years, or
    • Held for seven years and used by someone else for agricultural purposes.

Proposed APR and BPR rules (effective from 6 April 2026)

Whilst taxpayers will continue to benefit from the regular nil-rate and residence nil-rate band, which offer up to £500,000 of relief per person, from April 2026 these valuable additional reliefs will change as follows:

Business Property Relief (BPR):

  • 100 per cent relief applies only to the first £1 million of value.
  • Any value exceeding £1 million will qualify for 50 per cent relief.

Agricultural Property Relief (APR):

  • 100 per cent relief applies only to the first £1 million of value.
  • Any value exceeding £1 million will qualify for 50 per cent relief.

AIM-Listed Shares:

  • Relief will always be capped at 50 per cent, regardless of value.

The £1 million threshold for 100 per cent relief applies as a total cap across both BPR and APR. For example, you cannot claim £1 million of 100 per cent relief under BPR and an additional £1 million under APR – it’s a combined cap.

These changes are likely to increase the tax liability for larger estates and could impact succession planning for family businesses and farms.

What should you do now?

If you are wondering how this change might affect you, it is important that you:

  • Review your estate plan: Understand how the changes will affect your business and agricultural property holdings.
  • Seek professional advice: Work with an advisor to explore tax-efficient strategies to mitigate potential liabilities under the new rules.
  • Act early: With the changes coming into effect in April 2026, it’s important to act as soon as possible to assess your options and make any necessary adjustments.

For tailored advice on managing your estate and navigating the upcoming changes to BPR and APR, get in touch with our expert team.

Posted in News, Newswire.