What has actually changed?

Each individual now has a £2.5 million allowance of assets that can qualify for 100% APR and/or BPR. This is best thought of as a cap on the value of assets that can be relieved, not a reduction in the relief rate.

In simple terms:

• The first £2.5 million of qualifying agricultural and business assets can still benefit from 100% relief
• Any qualifying value above £2.5 million may be exposed to IHT at 40%, after taking account of the usual nil‑rate bands

Importantly, APR and BPR share the same £2.5 million cap. It is not £2.5 million for APR plus £2.5 million for BPR. It is one combined allowance.

However, some families may prefer to retain greater flexibility by using a discretionary or flexible will trust on the first death. This can:

• Preserve flexibility around how (and when) the deceased’s relief allowance is ultimately used
• Buy time to understand future relief exposure
• Defer irreversible decisions until asset values, relief availability and family circumstances are clearer

In practice, a discretionary trust is often used as a temporary holding stage, rather than as a final long‑term structure. Executors will usually have up to two years from the date of death to review the position and, where appropriate, redirect assets out of the trust once ownership positions are confirmed, valuations have been agreed and the inheritance tax exposure is better understood.

This allows decisions to be made with full information, rather than under immediate pressure following death. With land values continuing to rise, reviewing first‑death planning is now more important than it has been for many years.