CIOT publish comments on APR/BPR draft legislation

The Chartered Institute of Taxation (CIOT) has issued a hard-hitting response to the government’s draft legislation on Inheritance Tax (IHT) reforms affecting Agricultural Property Relief (APR) and Business Property Relief (BPR). While the reforms are intended to simplify the system, CIOT warns they risk doing the opposite — introducing new layers of complexity and creating severe unintended consequences for farming families and business owners.

Two areas stand out in their submission:

1️⃣ The Non-Transferable £1m Allowance
Unlike the existing Nil-Rate Band, the proposed new £1m allowance cannot be transferred between spouses. CIOT argues this creates an arbitrary and unfair outcome, particularly for those unable to update wills or restructure in time. The institute stresses this isn’t just a technical issue — the looming 6 April 2026 deadline, without transitional protections, could create a devastating “cliff edge,” with CIOT even raising the stark risk of mental health impacts, including suicide, among elderly farmers and business owners.

2️⃣ Mandatory Apportionment Rules
The draft rules require the £1m allowance to be spread across all qualifying assets. CIOT points out this blocks efficient allocation, undermines testamentary freedom, and directly contradicts the government’s stated policy aim that farming couples should be able to access up to £3m in allowances. Executors and advisers would also face significant administrative hurdles.

CIOT’s proposed fixes
To resolve these issues, CIOT suggests:

• Allowing an election so the allowance can be applied to specific properties.
• Introducing transitional rules to avoid cliff-edge risks in 2026.

As the professional body representing tax advisers, CIOT’s intervention underlines the high stakes for both families and businesses. Their call is clear: reform must deliver a tax system that is efficient, certain, and fair.

The message for business owners and farmers is equally clear: the impact of these proposed changes is real and potentially severe. Now is the time to review estate planning strategies, wills, and succession structures to protect your legacy before the new rules take effect.

Let’s talk about your financial goals — and how we can make them happen together, get in touch.