Agricultural property relief (APR) meaning

See Q&A: See Q&A: The estate included assets qualifying for agricultural property relief (APR) and/or business property relief (BPR), directed by the Will to be held on discretionary trust. Two years have elapsed since death and the trustees are looking to appoint property out of the trust, but are wary of exit charges. Will APR still be available on an exit if, during the two-year period, the trustees have owned/occupied the agricultural land, even though only one of the three trustees has been actively engaged in farming operations? How should the analysis then differ, where business property relief is also in point?...

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The Chancellor of the Exchequer, Rachel Reeves, delivered the government’s Autumn Budget on 30 October 2024 Keenly awaited and watched, this was the first Budget from a Labour administration in fourteen years, and the first ever presented by a woman Chancellor. Many headline measures for Private Clients had been trailed in one form or another, and several of the changes—such as the Capital Gains Tax reforms—were not as draconian as many had feared, proving less severe than anticipated. It was definitely a Labour Budget, unmistakably Labour in flavour, with the Chancellor honouring election pledges not to raise income tax or National Insurance for ‘working people’, and instead securing the £40bn of tax rises by lifting employers’ National Insurance, narrowing the scope of IHT agricultural and business property reliefs, increasing CGT rates, reforming the taxation of carried interest, changing the rules for non‑UK domiciled individuals, bringing inherited pensions into the IHT net, confirming VAT on private school fees, increasing the SDLT surcharge for second homes, and even a hike in...

Follow the link below to download the presentation. Contents Updates to APR/BPR Transfer between spouses Reasons asset targeting falls short APR/BPR trust clause Funding the trust Case study Case study solution Anti‑fragmentation Administration checklist Client communications Pitfalls and risks Summary These PowerPoint slides are designed as a foundation for a training session on Agricultural and Business Property Relief for the relevant fee earners. The presenter can tailor them—by trimming or expanding the points—to match the audience. How to use these slides Allow around two minutes per slide, and use the case study for a 20‑minute breakout. If more depth is required, the content can be delivered over two or three separate training sessions. Further reading Autumn Budget 2024—Private Client analysis Hot topic—the reform of business property relief and agricultural property relief Change in the approach to IHT planning for farmers Tax—Finance Act 2026...

FORTHCOMING CHANGE : In the 30 October 2024 Budget (Autumn Budget 2024), the Chancellor of the Exchequer revealed that the existing 100% inheritance tax relief available for qualifying agricultural property will be capped at the first £1m of value, with anything above that level benefiting from only 50% relief. On 23 December 2025, the government unexpectedly confirmed that the 100% relief ceiling would instead be set at £2.5m in total, replacing the earlier £1m proposal. Where the taxpayer, or their estate, also holds assets that qualify for business property relief, the value of those assets will be aggregated when determining whether the £2.5m limit has been surpassed for the purposes of the relief calculation overall. These measures will apply to deaths occurring on or after 6 April 2026, and to lifetime gifts made on or after 30 October 2024 if the donor dies on or after 6 April 2026. See: Autumn Budget 2024—Private Client analysis...

Private Client England & Wales glossary A Abatement When, after settling the deceased’s funeral costs, debts and liabilities, the remaining estate cannot satisfy all legacies in full, the gifts are reduced accordingly, unless the Will shows a different intention. In a solvent estate, the order for reduction appears in Part II of Schedule 1 to the Administration of Estates Act 1925. Refer to Practice Note: Payment of legacies. Accruals basis Where income is taxed on an accruals basis, it is attributed to a given tax year by reference to the number of days within that year during which the activity giving rise to the liability accrued. See Practice Note: What is the basis of income tax?. Accumulation and maintenance (A&M) trust A form of non‑interest in possession trust designed to benefit children and young people up to 25, which received favourable inheritance tax treatment between 1975 and 2006. See Practice Note: Accumulation and maintenance trusts—IHT [Archived]. Accredited Legal Representative (ALR) ...

FORTHCOMING CHANGE: At Autumn Budget 2024 on 30 October 2024, alterations to Agricultural Property Relief were announced, under which the 100% rate of relief will be restricted from April 2026. From that date, it will no longer apply to the entire value of qualifying agricultural property, but instead only to the first £1m of value. The portion of agricultural property above £1m will attract only 50% BPR. Any property which qualifies for business property relief (BPR) will need to be brought into account when assessing whether the £1m threshold is exceeded. For information on these changes, including draft legislation published with Autumn Budget 2024, see: Autumn Budget 2024 (paras 2.51 and 5.54), (para 2.12) and OOTLAR (para 2.12) and Autumn Budget 2024—Private Client analysis. 1 Legacy of qualifying agricultural property on discretionary trust 1.1 In this clause 1, ‘Qualifying Agricultural Property’ means any property whose agricultural value is treated as reduced by 100% by virtue of the property being agricultural property, through the application of sections...

This note offers general guidance on agricultural property relief (APR) from inheritance tax (IHT) applying on or after 6 April 2026, for non-legal professionals preparing a Will, and for personal representatives, trustees and beneficiaries of estates or trusts that include agricultural property. Your Private Client practitioner can provide tailored advice to suit your circumstances. As widely reported, the government has introduced changes to how IHT is charged on farms and agricultural property from April 2026 by amending agricultural property relief (APR). Comparable changes limit the IHT relief for business property by restricting business property relief (BPR). These reforms take effect mainly from 6 April 2026, though certain gifts or transfers to trusts made since 30 October 2024 are also within scope. This guide is intended to help you grasp what APR is and when it might be claimed. The availability of APR in differing situations is complex, and this guide provides only a brief overview. Please speak to your Private Client practitioner for more detailed guidance...

STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime. Finance Act 2025 (FA 2025), which received Royal Assent on 20 March 2025, brings in legislation to abolish the remittance basis of taxation and to replace it with a residence-based regime, with effect from 6 April 2025. FA 2025 also removes domicile as the key factor in determining liability to inheritance tax. Other measures include amendments to the rules determining excluded property status, the abolition of the protected settlements status of offshore trusts, and changes to overseas workday relief. For information on these changes, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025. FORTHCOMING CHANGE: Changes to agricultural property relief (APR) from IHT. At Autumn Budget 2024 on 30 October 2024, changes to Agricultural Property Relief were announced, under which the 100% rate of relief will be...