Glossary · UK
What is Agricultural Property Relief (APR)?
An IHT relief providing up to 100% exemption on the agricultural value of qualifying farmland and agricultural property, subject to a GBP 1 million combined cap from April 2026.
Full Definition
Agricultural Property Relief (APR) reduces IHT liability on qualifying agricultural property transferred on death or as a gift. Relief is available on the agricultural value (not the development or hope value) of: agricultural land or pasture, farmhouses and cottages occupied for the purposes of agriculture (subject to the farm character test), farm buildings. The rate of relief is 100% for property occupied by the owner for agriculture (directly farmed) or let on a tenancy commencing on or after 1 September 1995 (full Agricultural Holdings Act tenancies receive 50%). From April 2026, the government introduced a combined APR and BPR nil-rate band of GBP 1 million per person. Assets above GBP 1 million qualifying for APR or BPR receive only 50% relief (effective IHT rate 20%). The 2-year ownership rule applies: you must have owned the property for at least 2 years before death (or 7 years if the land was let when acquired). APR does not apply to non-agricultural land or the development hope value of farmland; CGT holdover relief may be available on such gains. From April 2027, the government confirmed pensions will also form part of the estate, increasing the importance of APR and BPR planning for farming families.