The inheritance tax treatment of qualifying agricultural and business property changed on 6 April 2026. If your estate includes a farm, trading business, shares or land, it is sensible to check whether your will and estate plan still produce the result you intend.
The nil-rate band remains £325,000, while the residence nil-rate band remains £175,000 where a qualifying home passes to direct descendants. Both are fixed through the 2030/31 tax year. The residence nil-rate band tapers for estates worth more than £2 million.
What changed on 6 April 2026?
Before April 2026, qualifying agricultural and business property could generally receive 100% relief without an overall monetary limit. For deaths on or after 6 April 2026, the 100% rate applies to the first £2.5 million of combined property qualifying for Agricultural Property Relief or Business Property Relief. Value above that allowance receives relief at 50%, creating an effective inheritance tax rate of up to 20% on the excess.
Any unused part of the £2.5 million allowance can transfer to a surviving spouse or civil partner, potentially increasing the survivor’s allowance to £5 million. If the first spouse or civil partner died before 6 April 2026, the full £2.5 million is treated as available for transfer, provided the appropriate claim is made.
Shares traded on AIM now receive Business Property Relief at 50%, rather than 100%, in all cases.
| Change | Before 6 April 2026 | From 6 April 2026 |
|---|---|---|
| Nil-rate band | £325,000 | £325,000 |
| Residence nil-rate band | £175,000 | £175,000 |
| APR/BPR at 100% | No overall cap | First £2.5 million |
| Relief above allowance | Usually 100% | 50% |
| AIM shares | Usually 100% | 50% |
| Unused allowance | Not transferable | Transferable to a spouse or civil partner |
Why the changes matter
Suppose someone leaves a qualifying trading business worth £3 million to their children. Assuming the full allowance is available, £2.5 million receives 100% relief. The remaining £500,000 receives 50% relief, leaving £250,000 exposed to inheritance tax. At the standard 40% rate, that could produce a £100,000 liability before other allowances or exemptions.
Tax attributable to qualifying agricultural or business property can generally be paid in 10 equal annual interest-free instalments, provided each instalment is paid on time. Even so, the liability may affect succession planning and cash flow.
This is why a will writing review can be valuable. A will cannot create relief where the legal conditions are not met, but it can affect who receives assets and how trusts operate.
Who should review their arrangements?
Consider a review if you own qualifying agricultural or business assets approaching or exceeding £2.5 million, hold AIM shares, have made substantial gifts since 30 October 2024, or have placed relevant property into trust. Trust rules depend on when the settlement was created and its terms.
You may wish to speak to solicitors near me in London if your will is outdated, your business value has changed or your family circumstances are different.
Practical next steps
Obtain valuations and confirm whether each asset qualifies for relief. Review your will, shareholder agreements, partnership arrangements, life cover and trusts together.
Executors can ask probate solicitors near me in London about allocating the allowance, claiming a transferred allowance and using instalments. When an elderly or vulnerable person updates a will, it is also important to understand how testamentary capacity is assessed.
Government estimates indicate that up to 1,100 estates across the UK could pay more inheritance tax in 2026/27 because of the reforms, compared with approximately 2,000 under the original 2024 proposals.
Frequently asked questions
Do I automatically need a new will?
No. However, a review is sensible where your estate contains business or agricultural property, AIM shares or trusts, or your will no longer reflects your circumstances.
Can a spouse use an unused £2.5 million allowance?
Yes. An unused amount can transfer to a surviving spouse or civil partner, although a claim must be made when the survivor’s estate is administered.
Get your will reviewed properly
At Atalaw Solicitors, our legal advice solicitors in London provide clear guidance tailored to your circumstances. The firm has more than 20 years’ experience in the legal field. Contact us today to discuss whether the April 2026 rules affect your will or estate plan.