13th July 2026 ❘

Farming Estates After the APR and BPR Changes: Why Estate Administration Has Become More Complex

Rebecca Adams, Agri and Estates Partner

By Rebecca Adams, Agri and Estates Partner

The changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) from 6 April 2026 have fundamentally altered the inheritance tax landscape for many farming families. Whilst valuable reliefs remain available, the introduction of a £2.5 million allowance for assets qualifying for 100% relief means that some farming estates will now face inheritance tax liabilities where previously none may have arisen.

Much of the discussion to date has focused on the potential tax cost. However, for executors and families dealing with a farming estate, the practical challenges of administration may prove just as significant.

Accurate Inheritance Tax Reporting Will Be More Important Than Ever

Historically, where an estate qualified for unlimited APR and BPR, the precise valuation of every farming asset was not always critical to the overall tax outcome. That position has changed.

Executors must now ensure that assets are categorised correctly and that relief claims are fully supported. HMRC is likely to take a greater interest in how agricultural and business assets have been valued and whether particular assets qualify for APR, BPR, both reliefs or neither.

The distinction between agricultural value, business value and open market value can be complex. Issues may arise in relation to development land, diversified farming enterprises, residential properties, farm cottages, holiday lets and partnership assets. A mistake in classification or valuation could significantly affect the inheritance tax payable.

Specialist Valuations Are Likely to Be Essential

Obtaining robust professional valuations is becoming increasingly important.

Valuers may need to consider:

  • The agricultural value of farmland compared with any development or “hope” value.
  • Whether farmhouses genuinely satisfy the conditions for APR.
  • The treatment of diversified business activities.
  • The value of partnership and farming business interests.
  • Assets which may qualify for BPR but not APR.

In many cases, careful valuation work will be critical in maximising the reliefs available and supporting the position taken in the inheritance tax account submitted to HMRC. Early engagement with suitably qualified valuers can often prevent costly disputes and delays later in the administration process.

Greater Scrutiny Means Greater Risk for Executors

Executors have a duty to ensure that inheritance tax returns are completed accurately. As the availability of APR and BPR becomes more valuable and more nuanced, the consequences of errors become more significant.

Farming estates frequently involve a mixture of land, buildings, livestock, machinery, partnerships, companies and diversified income streams. Determining how the reliefs apply across these assets is rarely straightforward.

Where substantial relief claims are made, executors should expect detailed enquiries from HMRC and should ensure that supporting evidence has been gathered from the outset.

Professional Advice Is More Important Than Ever

Every farming business is different. Ownership structures, partnership arrangements, tenancy agreements and succession plans can all affect the reliefs available.

The administration of a farming estate is therefore no longer simply an exercise in gathering assets and preparing tax forms. Increasingly, it requires close collaboration between solicitors, accountants, tax advisers and specialist rural valuers to ensure that the reliefs are properly identified, claimed and evidenced.

Taking advice at an early stage can help executors fulfil their duties, reduce the risk of HMRC challenges and ensure that the maximum available reliefs are secured for beneficiaries.

Looking Ahead

The recent APR and BPR reforms do not mean that farming businesses can no longer pass successfully between generations. However, they do mean that the administration of farming estates is becoming more technically challenging.

For families and executors alike, accurate valuations, careful inheritance tax reporting and specialist professional advice will now play a far greater role in protecting farming assets and ensuring that estates are administered efficiently and correctly.

For further advice you’re welcome to contact our dedicated Agri and Estates team – please just get in touch and we’ll be happy to help.

This article is intended as general guidance only and should not be relied upon as legal or tax advice. Specific legal, tax and valuation advice should always be obtained based on individual circumstances.