Inheritance Tax Relief Cap

The government has confirmed that the threshold for Agricultural Property Relief (APR) and Business Property Relief (BPR) will rise from £1m to £2.5m when the policy takes effect in April 2026.

The revised approach will be set out through amendments to the Finance Bill 2025. These will increase the value of assets eligible for 100% APR and BPR from £1m to £2.5m per estate. Assets above this level will continue to qualify for 50% relief.

The government also confirmed that widowed individuals will be able to transfer unused allowance of up to £5m from a deceased spouse or civil partner, including where the death occurred before the policy is introduced.

The announcement builds on plans set out in the 2025 Autumn Budget which confirmed that the original £1m allowance would be transferable between spouses and civil partners, that unused allowances could still be claimed where the first death occurred before 6 April 2026, and that the allowance will remain frozen until at least 5 April 2031.