The Autumn Budget announcement is always a big day in the UK’s financial calendar, and this year was no exception. In the hours leading up to the Chancellor’s speech, there was plenty of speculation-fuelled even more by a last-minute leak from the Office for Budget Responsibility (OBR) about the details of the budget. Social media buzzed, news outlets scrambled to interpret the hints, and many people wondered what surprises might be in store. 

As the Chancellor took to the dispatch box just after lunchtime, the country tuned in to hear what would change for the years ahead. 

There was a lot announced in the budget, which we covered in a deep dive here, but here is a snippet of one of the key topics.

 

Agricultural Property Relief (APR) and Business Relief (BR)

What are they?

Agricultural Property Relief (APR) reduces the value of qualifying agricultural assets, such as farmland, when calculating Inheritance Tax (IHT). It exists to help family farms pass down through generations without triggering a significant tax liability.

Business Relief (BR) reduces the value of certain business assets or shares in trading businesses for Inheritance Tax (IHT) purposes. Depending on the type of asset or shareholding, relief can be set at either 50% or 100%. BR is an important tool for succession planning, particularly for family-owned businesses and for investors in qualifying trading companies.

What’s the change?

Previously, both reliefs operated on a use-it-or-lose-it basis. If a spouse or civil partner died without fully using their available APR or BR relief, any unused portion could not be transferred to the survivor.

The new legislation changes that. A surviving spouse or civil partner can now inherit any unused APR or BR allowances from the person who has died.

This aligns these reliefs with the way transferable allowances already work for the IHT nil-rate band (NRB) and residence nil-rate band (RNRB), creating a more joined-up and predictable approach to succession planning.

What’s the impact?

This change makes it easier for farming families and some businesses to use the full allowance, even if one partner dies before using it all. The change brings APR and BR in line with other Inheritance Tax reliefs.

However, some may have already put planning in place, such as taking out life cover to insure against a potential inheritance tax bill or changing their Wills so that part of the farm passes directly to the next generation rather than the surviving spouse. These arrangements often come at a cost. With the changes announced in the Budget, it’s important to review these plans to see if they are still necessary, or if they should be updated to reflect these new calculations.

 

What Should You Do Now?

For most people, this Budget doesn’t require urgent action or a change of course. If you’ve been waiting for clarity before making financial decisions, you can continue with your plans. However, it’s important to recognise that, while there are few immediate changes, the impact of frozen allowances and future tax rises will build up over time.

For most, the best approach is to stay on track, keep your plans under review, and be aware of how gradual changes may affect you in the years ahead.

 

Need Advice?

With so many moving parts and individual circumstances, we believe in the value of independent, ongoing financial planning. If you don’t already have regular reviews, or if you’re unsure how these changes might affect you, please get in touch for a personal review. For clients who already benefit from our ongoing service, we’ll be happy to discuss the details and implications at your next annual review.

Remember: The best financial decisions are made with up-to-date, factual information and tailored advice. If you have questions or want to discuss your financial plan, we’re here to help.

 

Disclaimer

This summary is provided for general information purposes only and does not constitute personal financial advice, a recommendation, or guidance to make any financial decisions. The content is based on information available at the time of writing, including official Government announcements and reputable sources. Some measures discussed may be subject to further consultation, may not be implemented immediately, or could change as legislation develops.

Tax rules, allowances, and rates are subject to change and may vary depending on your individual circumstances and where you live in the UK. The impact of any changes will differ from person to person. You should not make financial decisions based solely on this summary. We strongly recommend seeking personalised, independent advice before taking any action in response to Budget announcements.

Past performance is not a reliable indicator of future results. The value of investments and the income from them can go down as well as up, and you may not get back the amount you invest.