The open consultation on reforms to APR and BPR is coming to an end – respond while you can

Significant changes to reduce Agricultural Property Relief (APR) and Business Property Relief (BPR) under Inheritance Tax (IHT) were outlined in the Autumn Budget.

Starting in April next year, a new cap of £1 million will be introduced per individual, with any relief beyond the cap set at 50 per cent in place of the previously unlimited 100 per cent tax relief on agricultural and business assets.

This change will push more people into paying IHT where once they would have been exempt.

IHT calculations for property settled in trust

Rather than being included in the value of a settlor or beneficiary’s estate on death, property settled in trust is subject to ongoing IHT charges.

This legislation will have an impact on the IHT payable on property settled in trusts, where that property qualifies for APR or BPR and exceeds £1 million in value.

The main relevant property trust charges are:

• 10-year anniversary charges
• Exit charges

However, there is a chance that the value could be reduced.

The value will be reduced to nil if the settled property is fully eligible for the 100 per cent rate of APR or BPR.

Additionally, this will ensure it is not subject to any 10-year anniversary charges or exit charges.

As the open consultation is still ongoing, it is possible to guide the Government on how the rules will work in practice for both regular estates and property settled in trust.

How can I respond to the main consultation questions?

The consultation questions are:

1. Are the rules on the application of the £1 million allowance for individuals sufficiently clear for transfers made on or after 6 April 2026? What are your views on this?
2. Are the rules on the application of the £1 million allowance for 10-year anniversary charges and exit charges sufficiently clear for property settled on or after 6 April 2026? What are your views on this?
3. What are your views on the proposal to standardise the calculation of Inheritance Tax exit charges, so that all exit charges are calculated based on unrelieved values regardless of whether the exit takes place before or after the first 10-year anniversary?
4. What are your views on the proposed transitional provisions for qualifying agricultural and business property settled into a relevant property trust before 30 October 2024?
5. What are your views on the proposed transitional provisions for qualifying agricultural and business property settled into a relevant property trust during the transitional period?
6. What are your views on introducing a single £1 million allowance for 10-year anniversary charges and exit charges where a settlor has transferred property into multiple trusts on or after 30 October 2024?
7. What are your views on introducing rules similar to the existing ‘related’ property provisions for Inheritance Tax, so that multiple holdings by the same settlor across multiple trusts can be connected for valuation purposes?
8. What are your views on the application of the £1 million allowance to special trusts, age 18 to 25 trusts, and QIIP trusts?
9. Do you have any further views on the application of the £1 million allowance to property that has been settled into trust?

Send in any responses that you have by 23 April 2025 using the online form or by emailing answers to aprbpr.consult@hmrc.gov.uk.

Leaving a response is the most effective way to communicate the impact it will have on you and your estate.

For further information on how it impacts you so that you can construct a more well-informed response, you can find the full details here.

Post consultation

The Government will publish a response, after the consultation has ended, before carrying out a technical consultation on draft legislation before any changes to APR and BPR come into effect.

Monitoring the evolution of this situation closely will ensure that you understand exactly how the new APR and BPR rules affect your estate and allow you to properly prepare for the future.

Seeking financial advice is always a smart move, and we are on hand to guide you through these changes and ensure that you retain as much control over your finances as possible so that your descendants get the inheritance you want them to get.

Contact our agriculture specialists today for more information and guidance on changes to APR and BPR.