UK BPR & APR Calculator — Finance Act 2026

From 6 April 2026, Finance Act 2026 introduces a combined £2.5 million allowance covering Business Property Relief and Agricultural Property Relief together. The first £2.5M of qualifying BPR + APR property still attracts 100% relief (no IHT). Any value above the allowance gets 50% relief, producing an effective 20% IHT rate (40% × 50%). The allowance is fully transferable between spouses and civil partners, so couples can potentially shelter up to £5M of qualifying property. The allowance was originally proposed at £1M but raised to £2.5M in December 2025.

AIM-listed shares previously attracted 100% BPR regardless of value. From 6 April 2026, they are capped at 50% relief irrespective of the £2.5M allowance. That gives an effective 20% IHT rate on the full AIM holding at death. AIM shares do not consume the £2.5M BPR/APR allowance, so they are treated as a separate 50%-relief asset class.

The £2.5M allowance is per person, and it is fully transferable between spouses and civil partners. If the first spouse dies without using their allowance, the unused percentage transfers to the survivor on a "transferable nil-rate band" basis. A married couple can therefore pass up to £5M of qualifying BPR + APR property at 100% relief, plus the standard £650k combined nil-rate bands and £350k combined residence nil-rate bands — up to £6M total IHT-free for estates with qualifying property, main residence, and full spouse transfers.

BPR: unlisted shares in trading companies, sole-trader businesses, partnership interests, and certain let-out business property — held for ≥2 years before death. APR: agricultural land, farm buildings, and farmhouses of character appropriate to the land, provided either owner-occupied ≥2 years or let for agricultural use ≥7 years. Both reliefs exclude "excepted assets" (assets not used for the trade) and non-trading investment businesses (wholly or mainly property investment companies, for example, do not qualify for BPR).

For estates below £2.5M of qualifying property, nothing changes — 100% relief still applies. For estates well above £2.5M (or £5M for couples with full spouse transfers), consider: lifetime gifting to use the 7-year rule and reduce qualifying property below the cap; structuring ownership between spouses to maximise both allowances; reviewing AIM portfolios given they are now permanently 50%-relief; and ensuring business assets satisfy the "trading" test (investment-heavy companies may not qualify at all). A STEP-qualified solicitor or chartered tax adviser should review the specific facts before reorganising.