What is agricultural property relief?
Agricultural property relief (APR) is an inheritance tax relief on farmland and farm buildings passed on during life or at death. Since April 2026, full 100% relief applies only to the first £2.5 million of combined farm and business property. Value above that gets 50% relief.
Tax relief for farmland has existed in some form for decades. APR covers the agricultural value of land used for farming, including farmhouses and buildings of a suitable size. The owner usually needs to have farmed the land for two years. If it was let to a tenant, they must have owned it for seven years. APR works alongside business property relief, which covers trading businesses, including many farm businesses.
Until April 2026, qualifying farms could pass on with no inheritance tax, however valuable. The 2024 Budget announced a cap. After protests by farmers, the allowance was raised in December 2025 from the planned £1 million to £2.5 million. It is shared with business property relief and can be passed between spouses, so a couple can pass on up to £5 million tax-free.
Above the allowance, relief is 50%, giving an effective inheritance tax rate of 20%. This can be paid in instalments over ten years without interest. Supporters of the change say the old relief let wealthy investors buy farmland to avoid tax. Farming groups say many family farms are asset-rich but cash-poor and may need to sell land.
Who it affects: Farmers and family business owners
Many on the left support capping the relief, arguing unlimited tax-free inheritance of land mainly helped the wealthiest estates.
Many on the right oppose the cap, warning it threatens family farms and food security.
Britain is split. Now you decide.
Set the farm and business relief allowance in the Population Decides Budget and see how rural voters react.
Play Population Decides freeCommon questions
How much is agricultural property relief?
100% on the first £2.5 million of combined farm and business property, then 50% above it.
Can the APR allowance be shared between spouses?
Yes. Unused allowance passes to a spouse or civil partner, so a couple can pass on up to £5 million.
When did the farm inheritance tax changes start?
On 6 April 2026.