A group of rural business owners and land managers have launched a legal challenge against the Government’s proposed changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) – key components of the UK’s inheritance tax (IHT) regime.. These long-standing reliefs have played a central role in enabling generational succession within farming and business communities for decades.
The claimants argue that the Treasury’s planned reforms, announced last year in the 2024 Autumn budget and due to take effect in April 2026, are being introduced without sufficient consultation and could have far-reaching and damaging consequences.
The claim, issued in the High Court on the 23 June 2025, seeks permission for judicial review. If granted, it could force the Government to revisit both its process and timing behind the proposed reforms.
What do APR and BPR currently do?
Agricultural and Business Property Reliefs have long allowed qualifying land, property, and business interests to be passed on to future generations free of IHT, often at a rate of up to 100% IHT relief. Crucially, there is currently no cap on the amount of relief that can be claimed.
These reliefs underpin intergenerational planning for farming families and private business owners alike. They were designed to ensure that working farms and trading businesses wouldn’t have to be broken up or sold simply to meet a 40% IHT bill upon death.
However, under the new proposals, which are due to take effect from April 2026:
- Relief under APR and BPR will be capped at £1 million per person;
- For estates passing assets to direct descendants (i.e. their children), this cap may rise to £3 million; and
- Any value above that cap will receive only 50% relief, meaning a 20% IHT charge will apply on the excess.
This marks a profound change and significant shift
For the first time, the IHT relief available for qualifying business and agricultural assets will be limited in value, and not fully exempt. For farming families who have spent generations building land-based enterprise, often in regions where land values have risen significantly. – this change risks creating IHT liabilities even where the farm remains a trading, working business.
The legal basis for the challenge
The judicial review, brought by a group of rural claimants, argues that the Government has failed to follow the rules set out in its own Tax Consultation Framework. That framework, in place since 2011, commits HM Treasury to consult in stages: first on policy principles, then on design, and finally on draft legislation.
According to the claimants, no such consultation has been carried out in relation to the decision to cap APR and BPR. Instead, the policy was announced in the 2024 Autumn Statement and included in budget papers without public or stakeholder engagement.
Notably, the claim does not seek to overturn the reforms entirely. Rather, it asks the Court to compel the Government to pause and conduct a full, lawful consultation before proceeding. If successful, this could delay implementation beyond April 2026.
What’s at stake?
For many families, this is about more than tax. It’s about continuity.
Succession plans have been made in good faith, based on existing rules. A working farm may be worth several million pounds on paper, but few families have that value in liquid assets to cover a sudden 20% tax bill. They risk disrupting succession plans that have been built carefully, and lawfully, around existing rules. For some, the only option may be to sell land or restructure at speed – actions that may compromise the integrity or viability of the business.
The lack of consultation has also fuelled a sense of injustice and uncertainty. Families who have planned prudently now face a fundamental change with little notice and no meaningful opportunity to respond.
How we are supporting clients
At Buckles, our Private Client and Agriculture teams are closely following the progress of the judicial review. Whether or not the legal challenge succeeds, the direction of travel is clear – IHT relief for business and agricultural property is narrowing. We are already working with clients to assess their exposure and implement proactive strategies to protect wealth and preserve business continuity across generations.
If you are concerned about the impact of the proposed changes, we encourage you to speak with us early to ensure your estate is prepared. Taking action now can make all the difference in navigating this evolving landscape.
Don’t wait for the rules to change – take control now and safeguard what you’ve worked generations to build.
