From 6 April 2026, significant changes will be introduced to two key inheritance tax (IHT) reliefs: Agricultural Property Relief (APR) and Business Property Relief (BPR). The most notable change is the introduction of a £1 million cap per individual on qualifying assets for these reliefs.

For many families, this marks a major shift in the way farms, trading businesses, AIM shares, and family trusts will be taxed upon death or when assets are transferred into trust.

If you think these changes may affect your estate, now is the time to review your plans.

What’s changing?

Currently:

• APR and BPR can reduce IHT by up to 100%, with no limit on the value of qualifying assets.

From April 2026:

• These limits apply per individual. Unused allowances cannot be transferred to a surviving spouse.
• The first £1 million of qualifying APR/BPR assets per person will continue to qualify for 100% relief.
• Any value above £1 million will only qualify for 50% relief, resulting in a 20% tax charge (40% IHT × 50%) on the excess.

Who’s affected?

These reforms will particularly impact:

• Family farms worth over £1 million (which is common given current land values)
• Trading businesses being passed down to children or grandchildren
• Family trusts holding company shares or land
• Investors in AIM-listed shares used for IHT planning

If your estate includes any of the above, you could face unexpected IHT liabilities—even if you have already planned under the current rules.

Key implications

Increased IHT Exposure
Example: A £2 million farm could face a £200,000 IHT bill under the new rules—where none may apply today.

Trusts Will Be Capped
New discretionary trusts (from 6 April 2026) will be subject to the £1 million APR/BPR limit. Even existing trusts will face 10-year charges on excess value.

No Spousal Transfer of Relief
The £1 million relief is not transferable between spouses. A will leaving all assets to the surviving spouse could waste the first allowance.

Lifetime Gifts Become Strategic
Making gifts before April 2026 could secure 100% relief under current rules, provided the donor survives seven years.

Liquidity Planning Is Essential
Even though IHT can sometimes be paid over 10 years interest-free, estates may still need to sell assets to raise the necessary funds.

What you should do now

We strongly recommend that you:

• Review your will – Ensure it makes full use of the available APR/BPR.
• Consider trust planning – New trust structures may require careful consideration.
• Make use of lifetime gifting – Now may be the ideal time to act.
• Review asset ownership between spouses – To maximise relief.
• Seek professional advice – Timing, valuations, and structure are critical.

Why it matters

These changes represent the most significant shift in IHT for business and landowners in decades. The assumption that your farm or trading company can be passed down free of tax may no longer be valid from April 2026.

The good news? There is still time to act—but the window is closing fast.

At bk plus, we are already working with clients to assess their exposure, model tax scenarios, and implement solutions before the new rules take effect.

Let’s talk

If you own a farm, run a business, or hold land or shares in trust, don’t wait.

Contact your bk plus adviser today to book a review.