They have an experienced team of trust and estate practitioners covering all aspects of the trust and tax planning areas. The team is attentive and provides an excellent service.
Chambers HNW 2024
There are significant cuts to APR and BPR coming soon which will impact farming families and landed estates. Our team of tax and estate planning experts are here to help you navigate these rules and maximise opportunities ahead of the 6 April 2026 deadline.
APR and BPR are specific reliefs from UK Inheritance Tax (IHT), which need to be claimed.
Previously, qualifying rural business and landowners could transfer their farms and landed estates to their children free from IHT thanks to a combination of APR and BPR. For rural businesses and landed estates, APR and BPR have always gone hand in hand. BPR has often been used to ‘top up’ APR to the extent that the value of property exceeded its agricultural value or in sheltering investment assets used in a composite business which is mainly trading.
In broad terms, land or buildings owned and used for agricultural purposes for at least two years if owner occupied (or seven years if let out) qualifies for APR. Most active trading companies where the shares have been held for two years qualify for BPR.
From 6 April 2026, instead of unlimited relief, there will only be a £1million allowance of combined agricultural and business assets per person. This allowance is not transferable to spouses / civil partners.
Similarly, APR and BPR assets currently held in trust will only benefit from a £1million allowance (with different tax treatment depending on when the trust was established).
Above the £1million allowance, 50% relief from IHT will apply, resulting in a 20% charge on death on qualifying assets.
In broad terms, prior to 6 April 2026, an unlimited transfer of qualifying APR and BPR assets can be made to a trust, free of IHT, provided the transferor survives seven years. Whilst a simple option is transferring outright to family members, we recommend a company or trust structure is considered, whereby additional protection can be provided in the event of divorce or bankruptcy.
The gift of assets to an individual or structure is a disposal for capital gains tax purposes, but relief is often available to postpone this gain, to prevent a dry tax charge.
If you believe these changes may affect you, please contact a member of the Michelmores team to arrange an initial call to discuss how we can help put you in the best position prior to 6 April 2026. Michelmores is able to provide advice on a bespoke structure for your individual and family situation, as well as implement your chosen structure.
At Michelmores, we are well-equipped to advise you in relation to the impact of the reforms on your rural business or landed estate and can offer practical solutions and implementation to mitigate any increased inheritance tax liability. Our expert teams can provide a one stop solution offering comprehensive support to enable you to navigate the evolving tax landscape.
We draft and advise on family constitutions, partnership agreements, shareholders agreements, articles of association and wills.
We advise on optimising Agricultural Property Relief and Business Property Relief to minimise IHT and protect rural businesses and landed estates.
We can draft trusts, act as trustee and administer trusts, offering a one-stop solution for advice and implementation.
We have experience in creating and implementing structures (including Family Investment Companies) that maximise tax efficiency and asset protection.
