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Inheritance Tax reliefs threshold to rise to £2.5m for farmers

Amy Woolliscroft30th December 2025
Oct - harvest photo.jpg

On 23rd December, the government announced an important update regarding agricultural property relief (APR). Starting from 6th April 2026, the thresholds for 100% relief will increase from £1 million to £2.5 million.

Under the revised rules:

  • Up to £2.5 million of qualifying agricultural assets per estate will continue to benefit from 100% relief from inheritance tax
  • The allowance will be transferable between spouses and civil partners, which means a farming couple may pass up to £5 million of qualifying assets free of inheritance tax (IHT)
  • Assets above these limits will continue to attract 50% inheritance tax relief

This change is crucial for farmers as it enhances their ability to pass on their agricultural properties and businesses, reducing any potential inheritance tax liabilities and ensuring that family farms and businesses remain sustainable across generations.

That said, there can still be an exposure to IHT that will need expert consideration.

Things to think about now 

While the increase in the threshold is welcome news, it remains important to review your current estate plans and succession strategies. Things to consider include:

  • The paperwork bits - your ownership and trading structure e.g. partnership agreements, and your Wills
  • Your succession plans – do they need to alter with the increased APR allowance
  • The relationship between APR and other IHT allowances
  • Any expected future land value growth and its impact on your plans

We are working on a revised version of our ‘Secure Your Legacy’ guides for farmers and business owners, but in the meantime if you would like to better understand how these changes may affect you and explore the best ways to plan for the future, then please get in touch with us on 01832 279170 or accession@sjpp.co.uk

If you are an existing Accession client, please be assured that your adviser will, as always, be already considering your position and the impact of these changes on your business and family.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

Advice regarding ownership and trading structures, will writing and partnership agreements will involve the referral to a service that is separate and distinct to those offered by St. James's Place ands are not regulated by the Financial Conduct Authority.

SJP approved 31/12/2025