By Mike Bagg, Tax Partner at Milsted Langdon

For decades, Agricultural Property Relief (APR) and Business Property Relief (BPR) have enabled farmers to hand down their land and assets largely free from Inheritance Tax (IHT).

These important reliefs were originally intended to keep farms intact from one generation to the next, so that they could carry on without needing to sell land or equipment to pay a tax bill.

APR typically covers farmland and agricultural buildings, while BPR extends to other business assets such as machinery, livestock and shares in qualifying companies.

Under the current rules there is no cap on how much of an estate can qualify for this 100% IHT relief, but that is about to change.

What’s changing to Agricultural Property Relief (APR) and Business Property Relief (BPR) from April 2026?

From 6 April 2026, the Government will introduce the following new threshold for these reliefs:

  • The first £1 million of qualifying assets per individual will remain eligible for 100 per cent relief.
  • Any qualifying value above £1 million will attract only 50 per cent relief, resulting in an effective 20 per cent tax rate on the excess.

In practice, this means that farms with significant assets, often easily exceeding that threshold, could face large IHT bills for the first time.

While the reforms will allow families to spread payments over ten years interest-free, this is still a major shift that demands careful preparation.

This has already generated considerable controversy and resulted in a number of farmer-led protests across the country.

However, despite this, many in the farming community are hoping for a last-minute reprieve from Government.

Why planning can’t wait

At the moment, the Government seems fairly resolute in its plans to introduce these changes, arguing that it will only affect a minority of farming families.

That’s why it is important to take steps now that help to minimise future tax bills for beneficiaries.

Farming assets are often tied up in land, machinery or livestock rather than cash. That’s why forward planning is vital, not just for tax efficiency but for the long-term stability of the business.

Farmers and landowners should use the next few months to:

  • Review ownership structures – Check whether assets are held personally, in partnership or through a company as this can change how relief applies.
  • Revisit wills and succession plans – Ensure they reflect current wishes and make use of available tax reliefs.
  • Consider lifetime gifting – Transferring certain assets during your lifetime with professional guidance can reduce future exposure.
  • Plan for liquidity – Explore life insurance or other strategies to ensure the estate can cover any potential IHT without selling off land or equipment.
  • Engage the next generation – Open discussions early about roles, responsibilities and long-term succession to avoid difficult surprises later.

The earlier these steps are taken, the greater the flexibility and the fewer the financial shocks when the new regime begins.

Turning IHT reform into opportunity

While these changes may feel like an added burden and a threat to the future prosperity of family farms, they also present an opportunity to take stock.

Many farming families have put off difficult conversations about succession planning for years and the 2026 reforms create a clear reason to bring everyone to the table.

By reviewing structures, clarifying ownership and putting tax-efficient strategies in place now, farmers can strengthen their operations and make the transition smoother for the next generation.

Start the conversation now

We’re already helping clients assess how the upcoming changes could affect their estates and what steps they can take to reduce exposure.

If you own or manage farmland, now is the time to act. Don’t wait for a reprieve from Government, review your position with our team today. Get in touch for tailored advice.