The UK Government has announced that it will be raising the proposed cap on 100% Agricultural Property Relief (APR) and Business Property Relief (BPR) from £1 million to £2.5 million per person, with 50% relief to be applied to assets above this limit.

Combined with the announcement during the UK Budget last month, that any reliefs will be transferrable between spouses, these changes will result in an effective £5 million allowance for married couples in a farming family.

These changes to APR and BPR are expected to come into effect on 6 April 2026.

Responding to the Government’s change of course on inheritance tax (IHT), FUW President Ian Rickman has said: “The news will be a welcome early Christmas present for many farmers across Wales who have endured months of uncertainty and anxiety caused by the UK Government’s ill-thought-out changes to IHT.

“The Government’s initial proposals for IHT reform caused untold worry for farming families, and have seriously dampened confidence across the sector and wider rural economy, as farmers have feared for the long-term succession of their businesses.

The FUW has consistently advocated for a fairer approach to inheritance tax reform, and has for the past year lobbied hard for the UK Government to change course and adopt a more proportionate approach. These calls have been matched by opposition parties, multiple cross-party parliamentary committees, and growing numbers of the Government’s own Members of Parliament.

“At a time of considerable uncertainty and volatility for farmers across Wales, the UK Government’s revisions to the tax threshold represent some much-needed relief.

“Though the FUW remains frustrated with the way the UK Government has approached these reforms, I would like to offer my thanks to Ministers in the Wales Office for their willingness to engage in dialogue with us on this issue to date.”