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The ICAEW has warned that the government’s proposed changes to agricultural property relief and business property relief for IHT are “at odds” with its approach to secure economic growth and will result in the demise of previously viable mutli-generational businesses.
It comes in response to a government consultation on how the proposed changes to APR and BPR for inheritance tax will apply to property settled into trust.
At last year’s autumn budget, the government announced its intention to reform APR and BPR from 6 April 2026. This would include restricting APR/BPR on assets that qualify for 100% relief up to £1m. Assets exceeding £1m would attract APR/BPR at 50%.
While the ICAEW expressed its support for the government’s approach to secure economic growth based on long-term policy certainty and an environment conducive to investment, the institute says the proposed changes will have an adverse impact on economic growth in many communities.
In particular, the accountancy body believes that the proposals are too wide in scope; the allowance for APR/BPR at 100% is set too low to meet the policy’s aims and should be transferable between spouses; and funding the IHT payment will be a “significant” issue for many farms and businesses, even with the option to pay by 10 annual instalments.
In addition, the ICAEW is concerned that the policy “unfairly” targets the elderly, while at the same time not being specifically targeted at any category of owner, such as larger landowners who buy land to rent out and claim APR.
Seeking a solution, the accountancy body has encouraged the government to look at how other countries have imposed conditions on similar reliefs, and provided a summary of the rules applying in the Republic of Ireland as an example.
