Changes to Agricultural and Business Property Relief (APR & BPR)

The Impact of the Changes 

In October 2024, the Chancellor announced changes to Agricultural Property Relief and Business Property Relief which will have a seismic impact on historic house businesses across the UK when they come into force in April 2026.  

The changes include a new £1 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 £1 million. 

Based on evidence from Historic Houses members, and evidence produced by organisations like Family Business UK and the Country Land and Business Association, it is clear that the reforms to APR and BPR are unlikely to produce the tax revenue anticipated and will instead serve to limit economic growth and productivity, particularly in the rural economy.   

APR and BPR were introduced specifically with the aim of fostering continuity, allowing long-term planning, and reducing economic disruption for small family businesses, which are typically illiquid (and therefore IHT bills are likely to result in sales, closure and break up of business). The impact on heritage of the proposed changes to APR and BPR has never been properly assessed, nor has Government ever adequately consulted businesses on the changes to APR and BPR.

To protect the UK’s heritage, Historic Houses, along with the CLA, are proposing the introduction of a clawback mechanism. This would see 100% relief retained for qualifying assets, but if these were sold within a certain time period post-death, the full 40% inheritance tax would be payable out of the proceeds of the sale.  

To ensure that this clawback mechanism does not damage ongoing businesses that sell assets to reinvest in their business, the clawback provision should not apply to APR and BPR assets which are sold where the proceeds of sale are reinvested in the business. 

Historic Houses response to the draft legislation of the Finance Bill Sub-Committee’s call to evidence can be seen here.