Kevin Read considers some of the inheritance tax issues on the horizon for trading businesses and farmers.
The changes to agricultural property relief (APR) and business property relief (BPR) announced in the Autumn Budget 2024 by Rachel Reeves mean that, for the first time in over thirty years, some farms and other trading businesses will potentially come within the inheritance tax (IHT) net from 6 April 2026.
The details of the plans are still to be finalised and there is some talk that the proposed £1m cap for 100% relief may be raised significantly. However, the changes will have a big impact on some businesses.
In most cases, the IHT arising will be capable of being paid by instalments, although this option will sometimes incur interest charges (see below), which will themselves be significant. At current interest rates, the interest would be more than one-third of the total tax bill!
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