Agricultural & Business Relief reform — what’s been announced so far

Changes to the inheritance tax (IHT) exemptions for Agricultural Relief and Business Relief have been a hot topic following the Government’s announcement in the Autumn Budget 2024. Since then, further updates have been released, making it harder for farming families and family businesses to keep track of what’s changing.

Here, Hayley Seddon from our private client team summaries the key announcements to date to help to make sense of it all.

Current position 

At present, Agricultural Relief and Business Relief offer up to 100% relief from IHT with no value cap. This applies to qualifying agricultural and business assets as well as AIM shares, provided that the relevant conditions are satisfied. 

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 creates 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. Combined with the announcement that the allowance can be transferred between spouses, we’ve moved from an allowance of £1m per individual with no clarity on transferability to a combined allowance of £5m per married couple. 

What does this mean? 

While the news of the increased allowance and transferability are welcome, farming families and business owners should still be proactive in reviewing their affairs to ensure financial security for their family and future generations.

There’s a short window of planning opportunity to move qualifying assets for Business Relief worth more than £5m into trust without an upfront IHT charge before April 2026.  If you’re considering gifting these assets into trust and want to know more, please get in touch.

Talk to us

If the recent announcements have left you 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.

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 below.

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