Inheritance tax is changing in 2026

If you own a farm, land, or a family business, you will almost certainly have heard that inheritance tax rules are changing. Some of the headlines have been alarming. The sensible response is this: don’t panic, but don’t ignore it either.

From April 2026, changes will come into force affecting agricultural property relief (APR) and business property relief (BPR). These reliefs have long played a key role in helping farms and family businesses pass from one generation to the next without triggering large inheritance tax bills.

Understanding what’s changing, and taking time to review your position now, can give you more choice, flexibility, and peace of mind for the future.

What are APR and BPR?

APR and BPR are inheritance tax reliefs that can reduce, or in some cases remove entirely, the inheritance tax due on qualifying agricultural or business assets when someone dies. They can also apply to certain lifetime gifts that become chargeable on death.

Until now, qualifying assets could often pass free of inheritance tax, regardless of value. For many farming families and business owners, this has been essential in keeping businesses intact and financially viable for the next generation.

What is changing from April 2026?

In the Autumn Budget 2024, the government confirmed that unlimited relief would come to an end.

Under the revised rules:

• Each individual will have a £2.5 million cap applying to the combined value of assets eligible for 100 per cent APR or BPR
• Any qualifying assets above £2.5 million will receive relief at 50 per cent
• This means the excess value could face inheritance tax at an effective rate of 20 per cent
• Any unused allowance can be transferred between spouses and civil partners, meaning a couple may be able to pass on qualifying assets worth up to £5.65 million tax free by combining two £2.5 million allowances and two £325,000 nil rate bands, where available

This follows significant pressure from farming and rural communities after an earlier proposal for a £1 million cap that would not have been transferable between spouses or civil partners. While the increase to £2.5 million has softened the impact, it still represents a major shift from the position many families have planned around for years.

Why this matters for you

For families with land-rich estates or asset-heavy businesses, these changes could result in an inheritance tax bill where none was expected before.

With the end of unlimited relief now confirmed for April 2026, it is important to:

• Review the current value of your assets
• Revisit wills, trusts and succession plans
• Check whether your arrangements still achieve what you want for your family and your business

Plans that worked well under the old rules may no longer deliver the outcome you expect.

Practical steps you can take now

1/ Review existing plans

Wills, trusts and business succession arrangements should all be checked in light of the new rules. Even small changes in legislation can have significant consequences.

2/ Look beyond tax

Good planning is not just about inheritance tax. It is also about protecting your family, keeping the business running smoothly, and making sure there is clarity about what happens next.

3/ Make sure valuations are up to date

The value of land, farms, businesses and investments changes over time. Accurate and current figures are essential when reviewing your position.

4/ Put safeguards in place

Lasting Powers of Attorney allow trusted people to manage your affairs if you are unable to do so in the future. They are an important part of wider planning and are often overlooked.

5/ Talk it through

Clear communication matters. Open conversations with family members and business partners can help prevent misunderstandings and disputes later on.

A review today can protect your family tomorrow

There is still time to act before April 2026, but early advice gives you more options and greater control.

At Hamers Solicitors, we can assist with inheritance and succession planning work by people who regularly advise farming families and business owners on long-term planning. Working alongside your financial or tax adviser, we can help you understand what the APR and BPR changes mean in practice and put a plan in place that reflects both your finances and your family values.

Inheritance tax rules may be changing, but with the right guidance, you can still plan with confidence.

Contact us

Loren McDermott is an Accredited Lifetime Lawyer here at Hamers. This means she has specialist training and experience in later-life and succession planning, helping families, business owners and farm owners navigate complex inheritance matters.

If you are concerned about inheritance tax or planning for the next generation, get in touch with the team to arrange a review.