Estate planning is an essential part of ensuring that your assets are passed on to your loved ones according to your wishes. But with recent changes to tax reliefs, it’s important to review your Will and ensure it’s up to date.

• What is Agricultural Property Relief (APR)?
• What is Business Property Relief (BPR)?
• What Has Changed?
• Why a Review of Your Will Might Be Needed
• Conclusion

What is Agricultural Property Relief (APR)?

Agricultural Property Relief (APR) is a relief from Inheritance Tax (IHT) available for qualifying agricultural property. This relief reduces the amount of inheritance tax payable when agricultural property is disposed of, usually following death. To qualify for APR, the asset must meet specific criteria, with relief available at either 100% or 50% depending on the property type.

What is Business Property Relief (BPR)?

Business Property Relief (BPR) is another relief from inheritance tax, available for qualifying business property. This relief reduces the inheritance tax burden following a disposal of business property, typically upon death. BPR is available at 100% or 50%, depending on the structure of the business and the type of asset.

What Has Changed?

Previously, it was possible to claim 100% relief on any qualifying asset, regardless of its value, provided it met the necessary criteria. However, following the October Budget, 100% relief is now capped. Each individual can only claim 100% relief on eligible assets up to a value of £1 million. Assets exceeding the £1 million cap will only qualify for relief at a reduced rate of 50%.

Why a Review of Your Will Might Be Needed

Unlike the Nil Rate Band and Residence Nil Rate Band, any unused Agricultural Property Relief (APR) and Business Property Relief (BPR) cannot be transferred to a surviving spouse. This could result in an individual effectively “wasting” their available relief if their estate is left to an exempt beneficiary, such as a spouse or a charity.

For anyone who may be eligible for APR or BPR, it is crucial to regularly review your Will to ensure that no relief is wasted. If your Will is not updated, you could end up paying more Inheritance Tax than necessary.

Conclusion

A review of your estate planning strategy, particularly in light of recent changes to APR and BPR, is essential. Make sure your Will reflects your current intentions, maximising available tax relief and ensuring your estate is managed efficiently. Speak with a qualified solicitor or tax advisor to ensure that your estate plan is optimised.

Hannah Pedley – Solicitor