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£1m 100% Business Relief and Agricultural Relief allowance to be transferable between spouses and civil partners.
Amy Woolliscroft1st December 2025
In the Budget delivered on Wednesday 26th November, it was announced that the £1m per person Business Relief and Agricultural Relief allowance will be transferable between spouses and civil partners if unused on first death, in the same way as the nil rate band and residence nil rate band currently is. This is true even if the first death occurs prior to April 2026.
Prior to this update, in the 2024 Autumn Budget it was announced that the government would introduce the new £1m allowance, which from 6 April 2026 will apply to the combined value of property in an estate qualifying for 100% business relief and 100% agricultural property relief.
This replaces the current regime, under which relief is unlimited for both asset types. Any amount over the £1m allowance will qualify for 50% relief.
Assets automatically receiving 50% relief (such as assets owned personally and used in the business of a trading company) will not use up the allowance.
When does this come into effect?
From 6 April 2026.
What should you do next?
The announcement that the £1m allowance will be capable of being transferred between spouses and civil partners is welcome news.
However, for many business owners and farmers with businesses worth in excess of £2m, planning in this area will still be important to maximise allowances and should seriously consider the potential solutions that may help mitigate your Inheritance Tax liability.
To understand more about how the business/agricultural relief allowance will affect you and the mitigating options that might be available to you, please contact us here.
The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is generally dependent on individual circumstances.
SJP Approved 1/12/2025