In the Autumn Budget 2024, the Government announced that the 100% Inheritance Tax reliefs for agricultural and business property would be capped at £1 million. This was re-confirmed in the recent 2025 Budget.
However, the Government has now announced that this cap will be set at a higher level, of £2.5 million per estate, when it is introduced in April 2026.
In announcing this concession, the Government explains that they have “listened to concerns of the farming community and businesses about the reforms”
The £2.5 million allowance will be transferable between spouses or civil partners, and the Government claims that the number of estates impacted by the increased limit will now reduce from 375 to 185 in 2026/27.
The allowance is set to remain fixed until at least 5 April 2031.
For estates exceeding the £2.5 million limit, reduced relief at a rate of 50% will apply.
