Legal News | 24.03.26
Trust Planning and Lifetime Gifts Into Trust
Trust Planning and Lifetime Gifts Into Trust After the April 2026 APR/BPR Reforms
As of 6 April 2026, Agricultural Property Relief (APR) and Business Property Relief (BPR) will be governed by a new capped-relief structure. The proposed changes will significantly reshape succession planning and the use of trusts for farming families and landed estates. There will be a £2.5 million combined allowance for agricultural and business assets, with any value above this mark receiving 50% relief.
The new APR/BPR landscape from April 2026
In instances where the allowance has not been exceeded, the unused amount can be transferred to a surviving spouse or civil partner; we understand this will include circumstances where the first death occurred before 6 April 2026. Due to the transferability of the £2.5m allowance, couples may be able to shelter up to £5 million of agricultural and business assets.
Lifetime Gifts Into Trust Under the New Rules
Lifetime gifts of agricultural/business assets into trust are also restricted by the £2.5 million allowance. Assets over this threshold receive only 50% relief, thus exposing the remainder to a lifetime inheritance tax charge at 20%. Trusts established pre-6 April 2026 could benefit from transitional provisions.
Impact on farming families and strategies going forward
Concerning the April changes, many farming families, specifically those with high-value land, will be faced with increased vulnerability to inheritance tax and will drafting must now reflect this capped relief system. Succession planning is vital for farming families and trusts remain key within this. Their role is to support generations of farmers, preserve agricultural property, prevent forced sales and manage diversification of assets.
Discretionary trusts are likely to continue to be valuable as trustees may wish, for example, to allocate fully relieved assets up to the allowance within two years of death and redirect any excess to their spouse. Immediate Post-Death Interest trusts could also be used to support income for surviving spouses while preserving farmland for children.
How our Agricultural and Landed Estates Team can help
The 2026 reforms require farming families to review wills, trusts and overall succession planning. Furthermore, trusts continue to be central to agricultural estate protection, despite reduced reliefs.
If you would like tailored advice or assistance, please contact our Agricultural and Landed Estates team on 01380 733300.
