Relief for farmers and businesses following partial agricultural and business property relief climb down.

Last year, significant changes were announced by Rachel Reeves to Agricultural Property Relief (APR) and Business Property Relief (BPR). These changes imposed a threshold on the 100% tax relief available on qualifying assets, to assets worth up to £1 million with only 50% relief applying to assets worth over that value.   Due to come into force on 6 April 2026, this change was likely to result in a large number of farms and family businesses facing significant inheritance tax charges.  

The government faced criticism from the farming industry for the risk that this tax posed to the farming community. As a result of ongoing pressure, the government has today (23 December 2025) announced a significant softening of its approach, confirming that 100% relief will now apply to qualifying assets worth up to £2.5million.

Coupled with Rachel Reeves' announcement in November that the 100% relief threshold will be transferrable between spouses and civil partners, this now gives a potential for qualifying assets worth up to £5 million to pass tax free.

Whilst not a complete climb down, the softening of the changes to APR and BPR will no doubt be welcomed by the farming community.