Agricultural & Business Relief reform — an update on the current position

15 June 2026

3 min read

Brabners Personal, Private Client & Estate Planning, Agriculture & Landed Estates

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Originally published on 2 February 2026 and updated on 15 June 2026.

Changes to the inheritance tax (IHT) exemptions for Agricultural Relief and Business Relief have been an ongoing hot topic following the Government’s announcement in the Autumn Budget 2024.

Since then, further updates have been released — including changes implemented in April 2026 — making it harder for farming families and family businesses to keep track of what’s changing. That uncertainty is only heightening concerns about the “human impact” of IHT.

Here, Hayley Seddon and Grace Dobson from our private client team summarise the key announcements to date to help you to make sense of it all.

Autumn Budget 2024

The Government first proposed significant changes to the way that these reliefs are applied in the Autumn Budget 2024. Instead of the reliefs being unlimited, 100% IHT relief on agricultural and business assets was to be limited to the first £1m of combined assets from April 2026. If the total value of qualifying assets exceeded £1m, the relief would apply proportionately and anything above that threshold would attract 50% IHT relief. The proposal also included reducing Business Relief on AIM shares to 50%. This Budget didn’t clarify whether the capped allowance would be transferable between spouses, as is the case with the nil rate band.

Autumn Budget 2025

The Autumn Budget 2025 announced that the allowance could be transferred between spouses in a similar way to the nil rate band rules. This created a combined allowance of £2m applied per married couple. This would apply to first deaths that occurred pre-April 2026.

December 2025 announcement

In response to feedback from farming families and family businesses, the Government increased the £1m allowance to £2.5m per individual.

Current position

Following the changes implemented in April 2026, individual owners of businesses and agricultural property can only claim 100% IHT relief on up to £2.5m of their qualifying assets. Where appropriate, this allowance can be transferred between spouses, meaning that this exemption can reach up to £5m per married couple.

Anything above this threshold will only receive a 50% relief, effectively paying IHT at a rate of 20%.

What does this mean?

These changes could have a particularly significant impact on business owners, individuals holding agricultural assets and those with growing estates.

Crucially, these legislative changes have triggered widespread uncertainty, with many individuals concerned about how they’ll generate sufficient liquidity to meet increasing IHT liabilities. In reality, this is a cost that many family businesses aren’t readily able to absorb.

Steps that you can take

For many, the ultimate aim is to ensure that assets can be passed from one generation to the next in the most tax‑efficient manner possible.

Measures such as lifetime gifting, exploring the use of trusts and regularly reviewing asset ownership structures can help to reduce potential IHT exposure and support long-term estate planning objectives.

Talk to us

If these ongoing changes have left you feeling unsure about how the new relief limits and allowances affect your family or business, we’re here to help. Our award-winning advisors can guide you through the changes, highlight any planning opportunities and support you in protecting your long‑term financial position.

If you’d like support or advice in addressing the IHT position of your estate, talk to us by giving us a call on 0333 004 4488, sending us an email at privateclient@brabners.com or completing our contact form.

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