The introduction of a £1 million cap on 100% business and agricultural property relief from April 2026 has been criticised particularly heavily by the farming industry. The government has announced a significant watering down of the measure. What’s happening?
The 2024 Autumn Budget announced the end of unlimited 100% agricultural and business property relief (APR/BPR) from April 2026. The plan was to introduce a combined cap of £1m, with any qualifying assets in excess of this to benefit from 50% relief. The announcement was met with outrage from the agricultural community. Tractor protests in Central London have been ongoing periodically ever since. One of the criticisms was that the allowance would not be transferrable between spouses/civil partners if it was unused. The Autumn 2025 Budget back peddled on this and confirmed a transferrable allowance, along the same lines as the existing nil rate bands. However, less than a month later the government has announced a significantly more generous amendment: instead of a £1m allowance, each individual will be entitled to a £2.5m transferrable allowance.
Accompanying the published details was the statement from the Environment Secretary that “We have listened closely to farmers across the country and we are making changes today to protect more ordinary family farms.” This seems rather odd, as the government had 13 months from the original announcement to “listen closely” to farmers (who weren’t exactly being inconspicuous) ahead of the November Budget, and you have to wonder what new feedback became available in the four subsequent weeks. Still, perhaps it’s best not to look a (Christmas) gift horse in the mouth!
