The government has announced a technical consultation on planned changes to agricultural property relief and business property reliefs for trusts.
It is seeking views on aspects of the application of the £1m allowance for property settled into trust qualifying for 100% APR or BPR.
In the autumn budget last October, the government announced several reforms to APR and BPR from inheritance tax.
This includes a £1m allowance which will apply to the combined value of property that qualifies for 100% BPR or 100% APR, or both.
After the £1m allowance has been exhausted, relief will apply at a lower rate of 50% to the combined value of qualifying agricultural and business property.
The government's new consultation, which closes on 23 April 2025 for responses, is inviting views solely on how these changes affect property settled into trust.
The consultation will likely be disappointing for the industry, which had hopes for a wider revisit of the controversial rules.
A trust is a legal entity that enables individuals to pass on assets while at the same time retaining some degree of control over them.
According to the Country Land and Business Association (CLA), trusts have been part of the English legal system for centuries, and there is a common misconception that they are used as a way to avoid paying tax.
Generally, the use of a trust will not in itself save tax, with the body explaining that they are often used to manage assets for those less capable of doing so themselves and to protect assets that have been given away.
The CLA says that farming families and landed estates often use trusts to ensure land and properties can be managed effectively for the benefit of a family, rather than being broken up and sold off by future generations.
The government said of its consultation: "We welcome views on the technical application of upcoming changes to APR and BPR to property settled into trust.
"These changes will have an impact on the inheritance tax payable by certain trusts comprising of property that qualifies for APR or BPR where the value of that property exceeds £1m.
"The government is consulting on this aspect to ensure the rules work as intended."
Responses can be submitted online or by email to aprbpr.consult@hmrc.gov.uk.
