Planning for future generations: why business and farm owners should review their wills

Significant changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) from 6 April 2026 make it essential for people with agricultural or business assets to review their wills and inheritance tax position.

These reliefs are valuable, but they’re now more restricted. Without careful planning, opportunities to maximise them may be lost.

What has changed?

Agricultural and business assets have long benefitted from favourable inheritance tax treatment, allowing them to pass between generations without a significant inheritance tax liability.

Before the recent changes, APR and BPR could reduce the value of qualifying assets by 100%, or in some cases 50%, without limit, provided certain conditions were met.

The new 100% relief allowance

From 6 April 2026, 100% relief is limited to the first £2.5m of qualifying agricultural and business assets. Any value above this threshold, which would previously have qualified for full relief without limit, now attracts relief at 50% only.

This new cap is known as the 100% relief allowance. Each individual has their own allowance of up to £2.5m.

Transferable allowance between spouses and civil partners

The new 100% relief allowance is transferable between spouses and civil partners. If it isn’t used on the first death, the unused balance can be claimed on the second death, potentially increasing the available allowance to £5m.

Should the allowance be used on the first death?

While transferability offers flexibility, there can be advantages to ‘banking’ the allowance on the first death. This is particularly relevant where there’s a risk that relief could be lost between the first and second death, for example due to changes in asset values or ownership.

Why wills need reviewing now

General gifts of agricultural and business assets to discretionary trusts

Historically, many married couples and civil partners used discretionary trusts in their wills to make full use of APR and BPR on the first death. Assets could be appointed into trust without triggering an inheritance tax charge, while still allowing flexibility for the surviving spouse or civil partner to benefit as a trust beneficiary.

However, a specific feature of the new legislation may mean this approach is no longer an effective way of banking the 100% relief allowance on the first death, where qualifying assets exceed £2.5m. This is because the 100% relief allowance must now be spread across all qualifying assets and can’t be allocated to specific assets. As a result, where the total value exceeds £2.5m, trustees may no longer be able to select particular assets to pass into trust with full relief.

For married couples and civil partners whose wills include gifts of agricultural or business assets to discretionary trusts on the first death, we recommend reviewing those wills as soon as possible to explore alternative ways to make full use of the £2.5m allowance.

This issue is likely to be relevant only where the following apply:

• Both spouses or civil partners are alive
• They own agricultural and/or business assets that could exceed £2.5m in value at the first death
• Their wills include a gift of those assets to a discretionary trust.

It won’t affect those who are already widowed, those who are unmarried or not in a civil partnership, those who don’t own qualifying assets that could reach this value now or in the future, or those whose wills don’t include this type of gift.

Gifts of specific agricultural assets

Wills that include gifts of specific agricultural or business assets, whether to trusts or individuals, should also be reviewed.

The new 100% relief allowance, and the way it must now be apportioned across qualifying assets, may otherwise result in unintended inheritance tax consequences.

Protecting your assets

The changes to APR and BPR are technical, but their impact can be significant. Wills that worked well under the previous regime may no longer achieve the intended outcome.

Reviewing wills now allows business owners and agricultural landowners to adapt their planning and preserve relief for future generations where possible.