Budget 2025 – change to the APR/BPR allowance

It was announced in today's Budget that the 100% Agricultural Property Relief and Business Property Relief £1 million rate will now be transferable between spouses.

This means that, on a person's death, any unused allowance can be transferred to their surviving spouse who can then set £2 million against any agricultural or business assets. It puts this relief on the same footing as the Nil Rate Band and Residence Nil Rate Band, which are both transferable. The plans, as previously drafted, would have potentially meant the use of trusts to ensure that both £1 million allowances could be secured where both spouses have interests in a business or agricultural property.  

However, use of a trust for the £1 million allowance still might be useful in reducing the value of the estate of the second spouse in order to be eligible for the Residence Nil Rate Band. As ever, its always best to seek professional advice on your own circumstances.