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On Monday, 21 July, the Government published draft legislation for inclusion in the Finance Bill 2025-26. This included clauses to implement the proposed changes to Business Property Relief (BPR), as well as Agricultural Property Relief (APR).
Overall, the draft legislation does not contain any major surprises. Disappointingly, the £1 million allowance which qualifies for 100% relief has not been made transferable between spouses as many had hoped. There is also no delay to the commencement date for the new rules, which remains 6 April 2026, despite significant lobbying, including from Family Business UK.
In more positive news, the £1 million allowance will be index-linked (to the Consumer Price Index), but not until 2029/30 (it is frozen until then, like the Nil Rate Band).
The process is that there will now be a technical consultation on the draft legislation, which will run for eight weeks ending on 15 September. It is worth noting that the Autumn Budget is expected to take place in late October or early November, likely whilst the Finance Bill is going through the Parliamentary process, when there is speculation around further tax changes.
The timing is now such that business owners who hold shares that qualify for BPR should review their succession planning strategies as soon as possible. This is also the case for owners of land-based businesses where APR may also be available. There are certain planning opportunities which exist between now and April 2026; however, further tax changes have the potential to limit those, meaning that now is the time to act. Please visit our website for further information on these changes.
Our Tax, Trusts & Succession team has significant experience in advising business-owning and rural land-owning clients on their succession planning and efficient structuring. Please contact Charles Frost to discuss this further.