Post Budget Update: Agricultural Property Relief

Agricultural Property Relief Update – Good News for Farmers!

Recent Government announcements have brought positive changes for family farms:

• APR/BPR allowance increased to £2.5m per person
• Transferable between spouses – meaning married couples can now benefit from £5m tax-free
• Designed to reduce inheritance tax pressures on family farms

These changes take effect April 2026, but families should still review Wills and land ownership now – especially if farm/business values exceed £5m.

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.

Sector lobbying – including efforts from NFU Cymru, of which JCP Solicitors is a Panel Member – seems to have coincided with some changes announced in the 2025 Autumn Budget, and, a further change announced in late December 2025.

Now, not only will the full relief be transferrable between spouses, but the allowance has increased to £2.5million per person.

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 spouses 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 £5million 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 £5million.

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 £5million, still need to take steps now to attempt to mitigate the tax bill on death.

What Does The Sector Think?

The changes have been largely welcomed as a “huge relief for many” according to the NFU.

In this article, NFU President Tom Bradshaw said: “Today’s announcement, which sees the tax threshold raised from £1m to £2.5m, will come as a huge relief to many. While there is still tax to pay, this will greatly reduce that tax burden for many family farms, those working people of the countryside.”

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.