Government Increases Threshold for Agricultural Property Relief and Business Property Relief  

The UK government has announced it will increase the threshold for Agricultural and Business Property Relief set to be introduced in April 2026.  

The government announced it would introduce an amendment to the Finance Bill 2025 which would increase the threshold at which 100% Agricultural Property Relief and Business Property Relief would apply; from April, eligible assets with a value of up to £2.5 million will be entitled to 100% relief (an increased threshold from the previously proposed £1 million). For assets above £2.5 million, relief of 50% will continue to apply.  

The non-taxable allowance can be transferred between spouses, who can also avail of the nil-rate band of £325,000 exempt from IHT in addition. This means that a married couple or civil partners can pass on a farm with a value of up to £5.65 million (including the two allowances and two nil-rate bands at £325,000) without incurring any tax liability. 

The amendments to the Finance Bill will mean that significantly fewer farming businesses will be affected by the higher taxable rate. In a press release on 23 December 2025, the government reported that this amendment will reduce the number of estates affected by the reforms to Agricultural and Business Property Relief by half, which will be welcome news for many farms across the UK. 

If you have any questions about the upcoming changes to Agricultural and Business Property Relief, or another tax matter, please get in touch with our Tax Director, Liam Coulter.