What does IHT apply to?
IHT is a tax on the estate (property, money, possessions) of someone who has died.
What is the nil-rate band for IHT?
£325,000. No IHT is due if the estate is below this threshold or left to a spouse, civil partner, charity, or amateur sports club.
How can the IHT threshold increase when passing on a home?
It can rise to £500,000 if the home is left to children or grandchildren.
What percentage is IHT charged at?
40% on the portion of the estate above the threshold.
How can the IHT rate be lowered to 36%?
If 10% or more of the net estate is left to charity.
How does taper relief affect gifts made before death?
Gifts made within 7 years before death may be taxed at a reduced rate depending on when they were given.
Can business assets be exempt from IHT?
Yes, Business Relief allows some business assets to be passed on tax-free or at a reduced rate.
How does Agricultural Relief affect IHT?
It may reduce or eliminate IHT on qualifying agricultural property.
Who is responsible for paying IHT?
The executor or administrator of the estate pays IHT to HMRC.
Can unused IHT thresholds be transferred?
Yes, a spouse or civil partner can inherit any unused threshold, increasing their own allowance.
What does APR provide relief for?
APR reduces or eliminates Inheritance Tax on qualifying agricultural property such as farmland, buildings, and farmhouses.
What does BPR apply to?
BPR offers relief from Inheritance Tax on qualifying business assets, including shares in unlisted companies and business premises.
How much relief is available under APR and BPR?
Up to 100% relief is available, but from April 2026, only the first £1 million of combined APR and BPR will qualify for 100%; the remainder will be eligible for 50%.
What reforms are being introduced to APR and BPR in April 2026?
Relief will be capped at 100% for the first £1 million of qualifying assets, with 50% relief thereafter.
Will environmental land qualify for APR from April 2025?
Yes, land managed under environmental agreements with public bodies will qualify for APR.
How will BPR apply to unlisted shares from April 2026?
Relief will be reduced from 100% to 50% for shares not listed on recognised stock exchanges.
Which estates are most affected by APR and BPR?
Family farms and small businesses benefit most; reforms aim to target reliefs more fairly.
Is it possible to claim both APR and BPR?
Yes, estates can claim both, but the combined value qualifying for 100% relief is capped at £1 million.
Why is the government reforming APR and BPR?
To ensure fairness and sustainability, targeting reliefs to prevent large estates from avoiding tax disproportionately.
How many estates will be impacted by the APR/BPR changes?
Around 2,000 estates annually, with most claims remaining unaffected.
What does APR provide relief for?
APR reduces or eliminates Inheritance Tax on qualifying agricultural property such as farmland, buildings, and farmhouses.
What does BPR apply to?
BPR offers relief from Inheritance Tax on qualifying business assets, including shares in unlisted companies and business premises.
How much relief is available under APR and BPR?
Up to 100% relief is available, but from April 2026, only the first £1 million of combined APR and BPR will qualify for 100%; the remainder will be eligible for 50%.
What reforms are being introduced to APR and BPR in April 2026?
Relief will be capped at 100% for the first £1 million of qualifying assets, with 50% relief thereafter.
