For those with business and farming interests in Northern Ireland, from 6 April 2026, important changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) will take effect. While these reliefs will continue to play a central role in inheritance tax planning for family businesses and farming families, the introduction of a cap on full relief represents a meaningful shift in how succession planning needs to be approached.
For many families, this will not remove APR or BPR altogether, but it will change how these reliefs are accessed, structured and preserved across generations.
A cap on full relief
Under the new regime, qualifying agricultural and business assets will continue to benefit from 100% inheritance tax relief, but only up to a combined value of £2.5 million per individual. Any value above this threshold will attract 50% relief, resulting in an effective inheritance tax charge of 20% on the excess.
The allowance will be transferable between spouses and civil partners, meaning that with appropriate planning, a couple may be able to shelter up to £5 million of qualifying business and agricultural assets at the full rate. However, this outcome should not be assumed and will depend on how assets are owned and how wills are structured.
What this means for family businesses
Family businesses often hold significant value in a single trading company, with limited cash outside the business. Historically, BPR allowed such businesses to pass from one generation to the next without creating an inheritance tax liability that might threaten the company’s viability.
From April 2026, larger owner-managed businesses may find that a proportion of the business value falls outside the full relief cap. This raises practical questions around succession, including whether funds will need to be extracted from the business to meet an inheritance tax liability, or whether ownership structures need to evolve to protect both the business and the family.
For many founders, this shifts the focus from tax efficiency alone to long-term business continuity and control.
Implications for agricultural families
The same issues arise for farming families, particularly where land values have increased significantly over time. Farms are frequently asset-rich but cash-poor, and the exposure of even part of the estate to inheritance tax can place pressure on the business as a whole.
While agricultural land and buildings may continue to qualify for APR, the new relief cap means that larger or diversified farms may no longer be fully protected. Succession planning will therefore need to consider how land is owned, who occupies it, and how future generations will manage both the farm and any associated tax liabilities without fragmenting the holding.
Trusts, succession and family control
Trusts remain an important tool for family businesses and agricultural clients, particularly where there are concerns around divorce, creditor exposure, or the readiness of the next generation to take control. However, trusts will also be subject to the new relief framework, and careful planning will be required to ensure that relief is not unintentionally restricted or wasted.
In particular, families who have historically relied on trusts to hold business or farming assets should review whether those structures remain appropriate in light of the relief cap and the accompanying anti-forestalling rules.
Planning ahead
The period before April 2026 provides an opportunity for families to review their existing arrangements in a considered way. This includes reviewing wills drafted on the assumption of unlimited APR or BPR, reassessing ownership structures between spouses, and ensuring that succession plans align with the commercial realities of the business or farm.
For many families, the key issue will not be minimising tax at all costs, but ensuring that any inheritance tax exposure does not undermine the viability of the family enterprise or force decisions at an inopportune time.
Conclusion
APR and BPR remain powerful reliefs for family businesses and agricultural families, but the changes taking effect in April 2026 mark a clear shift in approach. Relief is no longer open-ended, and succession planning now requires greater precision and earlier engagement.
Families who act early will have greater flexibility, more options and greater certainty. Those who delay may find that decisions are driven by tax and timing, rather than by what is best for the business, the farm and the family.
