The Government has announced today (Tuesday 23rd December) that the proposed Agricultural and Business Property Reliefs threshold for 100% relief will be increased from £1million to £2.5million per individual when the new rules come into effect from 6th April, 2026.
Following on from the previous announcement in November’s budget that the allowance will be transferable this means spouses or civil partners could pass on up to £5million in qualifying agricultural or business assets between them without paying any inheritance tax. This is on top of the existing nil rate bands of £325,000 each. As far as we are aware 50% relief will also apply to the excess value where qualifying agricultural and business assets are worth more than £2.5 million each or £5 million combined.
As a result of the increase in the limit this potentially means the farming assets of many of our clients should now be covered by the 100% relief. It will also benefit our trading company clients with considerable share value in their companies.
For anyone who dies after 5th April, 2026 within 7 years of lifetime gifts of farming/business assets they have made to individuals or into trust we understand the new limits will apply to any gifts brought back into charge as a result.
Where a spouse or civil partner dies before 6th April, 2026 we understand it will be assumed there is a full £2.5million allowance available to transfer to the surviving spouse or partner if they die after 5th April, 2026 based on the November, 2025 budget documents.
