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2024 budget changes to Agricultural Property Relief (APR) and Business Property Relief (BPR)?
Introduction
In the recent 2024 Autumn Budget, the UK Government introduced significant reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR), both crucial to the agricultural sector, particularly for farmers already facing inheritance tax (IHT) pressures. These changes aim to increase tax revenue but have sparked concern and criticism within the farming community due to their potential impacts on family farms, estate succession planning, and overall farm viability. This blog explores these changes, summarises industry reactions, and highlights how Pickerings Solicitors can assist farmers in adapting to the new fiscal landscape.
Key Budget Changes
The key changes which will take effect from 6 April 2026 are as follows:
100% relief will be limited to the first £1 million of combined agricultural and business assets for every person or pre-existing trust. Any agricultural or business assets above that threshold will be subject to IHT but at an effective rate of 20% of tax.
The £1 million relief will be applied proportionally between agricultural and business property where the total value of the qualifying property is more than £1 million.
The £1 million allowance is not transferable between spouses. This means careful planning will be needed to avoid wasting any allowance.
It has been confirmed that the scope of APR will also apply to land managed under an environmental agreement with an approved body from 6 April 2025.
Lifetime transfers made on or after 30 October 2024 where the transferor dies within seven years and after 6 April 2026 will be caught by the new regime.
These adjustments are aimed at increasing IHT contributions from high-value farms but have prompted concerns across the industry, where land and operational costs mean even modest farms may exceed these new limits.
Industry Reactions
Industry leaders and organisations have voiced strong objections to these reforms. Tom Bradshaw, President of the National Farmers' Union (NFU), highlighted that this cap threatens the financial viability of many family-run farms, describing the government’s approach as a “betrayal” to the farming community. He expressed concern that increased IHT costs would lead to forced land sales, which could undermine long-term sustainability and food security. Bradshaw noted, “The government does not understand, or perhaps does not care, about the impact on family farms” and called for the reversal of what he sees as a counterproductive policy for agricultural stability.
The Country Land and Business Association (CLA) echoed these sentiments, noting that the cap could harm up to 70,000 UK farms. CLA President Victoria Vyvyan criticised the changes, warning that the new caps could undermine rural economic health and push many farms into financial jeopardy. She emphasised that APR and BPR are vital in maintaining family-owned farms and ensuring generational continuity—a core component of British agricultural tradition.
Jeremy Clarkson criticised the 2024 Autumn Budget’s impact on farmers, describing it as “hopeless” and harmful to the farming community. Known for his advocacy through Clarkson’s Farm, he disapproved of Chancellor Rachel Reeves’ decision to cap inheritance tax reliefs on agricultural assets, cautioning that this move could lead to “the death of the family farm.” Clarkson urged farmers to persevere despite the pressures, hoping for changes under future leadership that might better support the farming sector
Conversely, some industry voices, such as those at the charity Sustain, expressed optimism around funding continuity for Environmental Land Management (ELM) schemes. They praised the budget’s commitment to sustainability efforts, which could offer farmers incentives for eco-friendly practices despite the challenges in inheritance planning.
Challenges for Farmers - How Pickerings Solicitors Can Help
The new APR and BPR thresholds add financial pressure to an already strained sector, where rising operational costs, inflation, and environmental factors have tightened profit margins. Farms facing IHT liability will need to carefully plan for tax obligations and potentially restructure their assets to ensure viability under the new rules.
At Pickerings Solicitors, we understand these challenges and are well-positioned to offer tailored legal advice to help farmers adapt to these changes. Our experienced team can advise on Inheritance and Estate Planning and help create succession plans to protect family assets.
The changes to APR and BPR in the 2024 Autumn Budget represent a significant shift for the agricultural sector, particularly for family-run farms. These reforms create new challenges but also underscore the importance of proactive inheritance tax and succession planning. Pickerings Solicitors is committed to supporting farmers through these adjustments, helping them preserve their legacy and adapt strategically to the evolving tax landscape. By navigating these changes effectively, farmers can continue to secure their businesses for future generations.
For further information on how we can assist, contact us on 01827 317070
