Policy paper

Changes to agricultural property relief and business property relief

This measure reforms agricultural property relief and business property relief from Inheritance Tax.

From: HM Revenue & Customs Published 26 November 2025 Last updated 3 March 2026
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Agricultural property relief and business property relief changes

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Details

This measure makes changes to the reliefs, as follows:

• a new £2.5 million allowance will apply to the combined value of property in an estate qualifying for 100% business property relief or 100% agricultural property relief or both — relief at the lower rate of 50% will apply to the value of any qualifying relievable property over £2.5 million
• any unused amount of the new £2.5 million allowance can be transferred to a surviving spouse or civil partner
• the rate of business property relief available will be reduced from 100% to 50% in all circumstances for shares admitted to trading on recognised stock exchanges designated as ‘not listed’
• the option to pay Inheritance Tax by equal annual instalments over 10 years interest-free will be extended to all property which is eligible for agricultural property relief or business property relief
• a £2.5 million allowance will also apply to the combined value of relievable agricultural and business property in trusts These will take effect from 6 April 2026.

Updates to this page

Published 26 November 2025 Last updated 3 March 2026 show all updates
1.
3 March 2026

This tax information and impact note has been updated to include the Exchequer Impact of the policy announced on 23 December 2025, following the publication of the March 2026 forecast.
2.
9 January 2026

This tax information and impact note has been updated following the Government announcement on 23 December 2025 that the allowance for 100% rate of relief will be increased from £1 million to £2.5 million. The Government has introduced the amendment to the Finance Bill.
3.
26 November 2025

First published.

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