BPR/APR £1M Cap IHT Calculator 2026

Following the Autumn Budget 2024, Business Property Relief and Agricultural Property Relief will be capped at £1,000,000 combined at 100% from 6 April 2026. Qualifying assets above £1M will only receive 50% relief, making the excess subject to IHT at 40%.

For BPR/APR assets above £1M: 50% is chargeable at 40% = effective IHT rate of 20% on the excess. For example, £2M in business property: first £1M exempt, £1M × 50% = £500K chargeable, IHT = £200K (ignoring NRB and other assets).

No — the £1M is a combined cap for BPR and APR together. So a farmer with £600,000 in farmland (APR) and £500,000 in qualifying business assets (BPR) totalling £1.1M would only have £1M exempt; the remaining £100,000 gets 50% relief.

Yes. AIM shares qualifying for BPR will be subject to the same £1M cap from April 2026. Above £1M combined, AIM shares will attract 50% relief and the remaining 50% will be subject to IHT. Previously all qualifying AIM shares had 100% BPR.

Options include: lifetime gifts of BPR assets to family (7-year PET clock starts), restructuring ownership between spouses/civil partners (each gets their own £1M allowance), life insurance in trust to cover potential IHT liability, or bringing forward succession planning.

Based on HMRC's published guidance, each individual's estate will have its own £1M cap. Married couples can therefore potentially shelter £2M of BPR/APR assets in total across their two estates, by structuring ownership appropriately before death.

The cap is not explicitly linked to inflation in the Budget 2024 legislation. It is set at £1M from April 2026 and will likely remain frozen (similar to how the IHT nil-rate band has been frozen since 2009), eroding its real value over time.

Yes — relevant property trusts holding qualifying BPR/APR assets will be affected. The 10-year anniversary charges and exit charges will also need recalculating based on the new reduced relief. Trusts with large BPR portfolios face significant planning implications.