13 Days to Go: APR & BPR Changes Are About to Reshape Inheritance Tax Planning
With only 13 days remaining until the UK government’s significant reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR) come into force, families and business owners are entering a critical period of preparation. At Atla, this has been an exceptionally busy time, supporting clients and their advisers as they prepare for the most substantial changes to inheritance tax reliefs in decades.
The New Landscape from 6 April 2026
From 6 April 2026, the inheritance tax landscape will undergo sweeping changes. If you believe you may be affected by these reforms—or are unsure whether your estate or business qualifies under the new rules—it is vital to seek professional guidance now.
What’s Changing?
- Introduction of a £2.5 Million Combined Relief Allowance for APR and BPR.
- This means, for the first time, 100% APR and BPR will be subject to a cap. Estates will be able to claim up to £2.5 million of combined relief on qualifying agricultural and business assets.
- For assets exceeding the £2.5 million allowance, only 50% relief will be available. This effectively introduces a 20% inheritance tax charge on the value above the threshold—a marked departure from the current regime, where many estates benefit from full relief with no upper limit.
- The new allowance is transferable between spouses. This means that couples can access up to £5 million of combined APR/BPR relief, representing a key planning opportunity for family-owned farms and businesses.
- To assist with cash flow, there is now the option that inheritance tax, payable on eligible APR and BPR assets, can be paid in 10 annual instalments interest free.
- The draft legislation confirms that these reforms will not only apply upon death, but also to chargeable lifetime transfers and trust arrangements. This change will affect periodic and exit charges, prompting trustees and families using trusts for succession planning to reassess their existing structures.
How the Reforms Will Affect Tax Positions
The impact of these reforms will differ depending on the circumstances, but several themes are already evident:
- Large farming estates and high-value business assets will face new inheritance tax exposure. For example, a farm previously valued at £10 million could have passed free of inheritance tax; under the new rules, £7.5 million could now be subject to a 20% charge.
- Business owners with diversified or non-core assets may lose relief if those assets no longer meet the updated definitions.
- Trusts holding agricultural or business property may face increased periodic charges, necessitating proactive restructuring.
- Families who have previously relied on unlimited relief must now consider liquidity, particularly where estates are asset-rich but cash-poor.
In essence, these reforms introduce a ceiling where previously there was none, meaning many estates will face inheritance tax liabilities for the first time.
The Importance of Immediate Planning
With just over a month left before the changes take effect, it is crucial to:
- Review asset valuations
- Assess exposure above the £2.5 million threshold
- Consider lifetime transfers before the new rules are implemented
- Re-evaluate trust arrangements
- Coordinate with accountants, solicitors, and financial planners
Atla has been working closely with clients and their advisory teams to model the effect of the reforms and implement strategies to protect family wealth under the new regime.
Seek Guidance Now
If you are uncertain about how the APR and BPR changes may affect your estate, business, or long-term plans, it is important to seek advice as soon as possible. Acting early ensures you have the widest range of options available to you.
