APR/BPR reform to go ahead
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The Government has confirmed that its planned changes to agricultural and business property relief will go ahead from 6 April 2026 as originally proposed (with one minor exception around valuation - multiple trusts will not be subject to a ‘related property’ anti-avoidance rule as this is too complex to implement).
Other than that, the Government have not heeded calls to delay or soften the changes.
As a result, there will be a limit to inheritance tax relief for agricultural and business property where a charge to tax arises after 6 April next year. In summary, 100% relief on AIM shares will be withdrawn entirely and be replaced with 50% relief. All other relevant qualifying property will only obtain 100% relief on the first £1mn, and thereafter relief will reduce to 50%.
Draft legislation has been published, alongside a brief summary of the responses to the consultation on the measures. There are detailed rules around the application of the relief to trusts as well as individuals. Although the legislation is not yet final, the direction of travel is now clear and this seems unlikely to change significantly.
Therefore individuals and trustees with qualifying agricultural &/or business property will now want to consider the impact of these changes in detail and how they, or their estates, will fund any tax charges. There are opportunities to restructure holdings between now and next April. Please see our earlier briefing for further detail of the changes and planning opportunities, or speak to your usual Boodle Hatfield adviser for bespoke advice.
