Autumn Budget Breakdown: Agricultural Property Relief
The Autumn Budget, announced on 26th November, included multiple policy changes which impact lifetime planning, pensions, taxes, and benefits. This included a change to previously announced proposals regarding Agricultural Property Relief (APR) and Business Property Relief (BPR). Beverley Bowen, Director and Head of Lifetime Planning (Swansea & West) at JCP Solicitors, explains what the changes mean for the agricultural sector.
What Has Changed For Farmers?
In last year’s Autumn Budget, there was a proposal that the rules relating to APR/BPR were due to change from April 2026. The new rules would mean that farmers would only get £1million of full APR/BPR, any assets above the £1million would get relief at 50% and the other 50% would be taxed at 40%. The £1million allowance was not to be transferrable between spouses.
This put many family farms at risk, as farmers may have been forced to sell off assets and break up the family farm in order to cover Inheritance Tax bills.
Following lobbying from the sector - including NFU Cymru, of which JCP Solicitors is a Legal Panel Firm for Mid and South Wales– there have been some changes announced in the 2025 Autumn Budget.
Now, the £1million allowance of full relief will be transferrable between spouses. Farmers who are married, or have deceased spouses, can transfer their inheritance tax allowance to one another if one of them dies having not used their full allowance.
How Does This Impact You?
This change means that married couples can leave all their assets to their spouse on first death, and when the farm is then passed down to the next generation upon second death, those inheriting the farm will have £2million of APR/BPR assets qualifying tax-free as they can claim both deceased’s tax relief.
According to the UK Government, these changes will reduce the number of family farms paying more inheritance tax when the changes come into force from April 2026, as the changes will only impact family farms worth over £2million.
At JCP Solicitors, we would still advise families to review land ownership and their Wills, but if this has not been done it will hopefully not have as devastating an impact as it would otherwise have had. Families, particularly where the farm and business has a value greater than £2million, still need to take steps now to attempt to mitigate the tax bill on death.
What Does The Sector Think?
Whilst disappointing that the removal of full APR relief for farmers has not been fully repealed, this move is preferable to no action at all.
The NFU would like to see more changes to ensure more family farms are protected and ensure that they will not need to be sold or divided to pay inheritance tax bills. There remain over 1,400 farms in the UK who will need to pay tax on death, and the sector say the change will not alleviate the serious impact of the tax on the elderly and terminally ill.
In this article, NFU Cymru President Aled Jones said: “I acknowledge the change announced today will help a limited number of farmers, but it does not mitigate the devastating impact of this policy for many.
“In making this change the UK Government is essentially recognising that mistakes have been made in the way in which this policy was designed. I welcome the fact that they appear to be acknowledging these errors, but the step they are taking does not go nearly far enough to reduce the damage that this policy will do to Wales’ family farms, our rural communities, Welsh language and culture.”
If you would like expert legal advice and guidance on lifetime planning for farmers, JCP Solicitors can help. Contact Beverley Bowen by calling 01792 525458 or emailing beverley.bowen@jcpsolicitors.co.uk.
Read more from NFU Cymru here: The Chancellor’s Autumn Budget - what has been announced on IHT – NFU Cymru