Merry Christmas to farmers and business owners - a surprise (and very welcome) increase to the 100% APR/BPR allowance

In an unexpected move, the Government has today (23 December 2025) provided a very welcome early Christmas present to farmers and business owners.  The Government has announced that, from April 2026, the 100% relief allowance for business and agricultural property will be increased from the previously announced £1m to £2.5m per person, or £5m for a married couple.  50% relief will continue to apply above this allowance.

This is extremely welcome news.  The Government’s announcement was untrailed and it is unclear what has prompted it; although there has been widespread lobbying on this point since the reforms were first announced in the 2024 Budget, there was no indication before now that the Government had been minded to make this concession.  The change might have been prompted, in part, by the recent Farming Profitability Review (discussed here by my colleague, Maddie Dunn - The Farming Profitability Review and the new Farming and Food Partnership Board: what’s new and what do you need to know?), although it is understood that this report had been prepared prior to the most recent Budget when such an announcement would have been more expected.

In any event, as the Government’s announcement details, the increased allowance should reduce the number of farmers and business owners affected by the proposed changes, and provide more targeted protection for smaller farms and businesses. 

The changes will be incorporated into the draft Finance Bill.  For those with trust arrangements, we await news on whether the trust 100% allowance will be likewise increased.