BPR/APR £1M Cap IHT Calculator 2026
Calculate the IHT impact of the April 2026 Business Property Relief and Agricultural Property Relief £1M cap. Compare pre/post-2026 IHT bills for business owners and farmers.
BPR/APR £1M Cap Calculator 2026 (Autumn Budget 2024)
From 6 April 2026: Business Property Relief and Agricultural Property Relief are capped at £1M combined (100%). Above £1M, only 50% relief applies.
Frequently Asked Questions
What is the BPR/APR £1M cap from April 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%.
How much IHT will a business owner pay with assets over £1M?
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).
Does the £1M cap apply separately to BPR and APR?
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.
Does the change affect AIM shares?
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.
What can business owners do before April 2026?
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.
Do spouses each get their own £1M BPR/APR allowance?
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.
Is the £1M cap inflation-linked?
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.
Does the 2026 change affect trusts holding business/agricultural assets?
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.