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A Welcome Relief

Ever since they were announced at Autumn Budget 2024, the Government’s reforms to Agricultural Business Relief (APR) and Business Property Relief (BPR) have been a source of great concern to many owners of farms and family businesses. This has been particularly the case for farmers, who worry that an Inheritance Tax (IHT) bill may be unaffordable given the combination of small farming incomes and high land values, and therefore that succession to the next generation may become unviable.

However, in a rare bit of good tax news, the Government announced a pair of changes late last year that will both save tax and somewhat simplify planning.

The changes

For a full explanation of the reforms as originally proposed, see our previous article. In brief, they mean that from 6 April 2026 a cap will be introduced on the total value of property on which APR and BPR can be claimed at the rate of 100%. Anything above that threshold will be limited to 50% relief.

The first change to the proposed reform came at the 2025 Budget, when it was announced that the threshold would become transferable between a married couple or civil partners. In other words, if the person who died first did not fully utilise their own 100% allowance (for example, because they left the assets qualifying for relief to their spouse/civil partner), the person who died second would then be able to claim a double allowance.

Significantly, the Government confirmed that this would apply even where the first person had died before the reforms were announced. This will therefore avoid one of the significant points of unfairness that had been identified with the original proposals, in which a person who had been widowed before Autumn Budget 2024 would have missed out on the opportunity to take advantage of their deceased spouse/civil partner’s allowance.

The second change was slipped out in a press release on 23 December 2025, although no doubt will have come as a welcome Christmas present for many families. This increased the allowance for 100% relief from £1 million to £2.5 million.

What it means for you

These changes will clearly be good news for owners of family businesses and agricultural land. Two key benefits are:

• the transferability of the allowance means that it will no longer be as necessary to structure estate planning in such a way as to utilise the allowance on the first death (for example, by giving a share of the land/business to children or a trust); and
• the increased thresholds can reduce IHT bills for anyone with a farm or business worth more than £1 million, and for some may mean they no longer have an IHT bill at all.

However, despite these changes, careful planning and expert advice will still be very important.

For one thing, many families will still find themselves with a sizeable IHT bill even with the increased threshold. They may benefit greatly from proper estate planning advice. The best strategy will of course depend on their particular circumstance, but could for example include lifetime gifts of land, company shares or partnership capital, or redirecting assets into a trust (which will still benefit from their own separate £1 million allowance for 100% relief).

Moreover, it is important to remember that the conditions for claiming APR and BPR have always been very strict and full of traps for the unwary. Very small details may result in a loss of relief (and therefore a vastly-higher tax bill) if not spotted in time.

If you are planning to rely on APR or BPR as part of your own succession plan, please do contact the Private Wealth and Tax team at Quastels, who have a great deal of specific experience in this area. We can review your current arrangements and identify the risks and opportunities you need to consider.

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Removal of the Unfair Dismissal Compensation Cap: Rethinking Board Strategy

The UK employment tribunal compensatory award cap has until now limited financial exposure for unfair dismissal claims. That certainty is soon disappearing. Once the cap is removed, tribunals can award losses reflecting an executive’s actual full earnings including base salary, long notice periods, discretionary bonuses, and long-term incentives. For senior executives, claims could easily reach seven figures.

This change will fundamentally affect how Boards manage senior exits. Informal processes, limited performance documentation, and reliance on ‘loss of confidence’ are no longer safe. Tribunals will examine whether dismissals were reasonable and evidenced, and may ask what would have happened if the employer had acted fairly, considering potential performance outcomes, bonuses, and incentive awards. Even discretionary bonuses could now become part of claims.

The implications are Board-level, not just HR. So, what do Boards need to consider going forward?

• Performance oversight: Boards must ensure clear, measurable, and documented expectations for senior executives.
• Exit strategy: Settlement ranges and notice periods need to reflect potential uncapped liability.
• Bonus design: Timing and clarity of discretionary awards are critical.
• Governance discipline: Decisions must be evidence-based, documented and defensible.
• Board capability: NEDs must be confident in managing C-suite performance and challenging executive peers.
• Risk assessment: Employment litigation exposure and insurance coverage should be reviewed and well in advance of any conversations with the senior executive.

Boards which are unprepared for this shift risk material financial exposure, reputational harm, and potential for high-stakes litigation. The removal of the cap is not just a legislative change but a call for Boards to elevate performance management, governance discipline, and deeper risk assessments.

With significant experience in advising Boards on people-risk, executive remuneration, and governance, I see this as a pivotal moment for leadership accountability. Boards that act now will safeguard both people and organisational reputation, while strengthening confidence in making difficult but necessary leadership decisions.

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Family Friendly Leave: What’s New, What’s Coming and What Employers Should Do Now

Family-related employment rights are continuously expanding and becoming increasingly more detailed. With the Government set to introduce even more changes over the next two years, I have summarised the key details of what’s new and what to expect.

Recent Changes Already in Force

Neonatal Care Leave & Pay

Eligible parents whose babies meet the qualifying conditions and require specialist neonatal treatment have a right to take up to twelve weeks of leave from day one of employment.

What does this look like in practice? Where an employee has a premature baby that spends several weeks in hospital, they can take neonatal care leave on top of their maternity, paternity, adoption or shared parental leave.

What about the pay? Eligible employees will receive statutory neonatal care pay which is calculated using the standard statutory formula like maternity/paternity pay (i.e., the lower of £187.18 per week or 90% of average weekly earnings). This is designed to give parents genuine breathing room during what is often an overwhelming and emotionally difficult period.

When does it need to be taken? This leave is flexible and can be taken in blocks or as one period (depending on the regulations and employer policy). In reality, most parents take it immediately following a neonatal admission, but the rules allow the leave to fit around individual family needs.

Statutory Carer’s Leave

Employees now have the right to one week’s unpaid carer’s leave per year to provide or arrange care for a dependant with long-term care need. This right is available from day one of employment.

What counts as a long-term care need? A dependant with a long-term care need is someone that may have:

• an illness or injury requiring care for more than 3 months; or
• a disability under the Equality Act; or
• care needs related to old age.

Employers are required to grant this type of leave and may only postpone (not refuse) in exceptional circumstances, i.e., where taking leave at the requested time would cause serious operational disruption.

Many employers understandably confuse carer’s leave with other similar types of leave. There are clear distinctions between these types of leave as follows:

1. Carer’s leave: unpaid leave for planned or foreseeable responsibilities for someone with a long-term condition
2. Time off for dependants: unpaid leave for short notice or emergencies regarding dependants
3. Compassionate leave: discretionary leave to deal with traumatic events or bereavement. This can be paid or unpaid depending on the company’s policy.

Proposed Changes Under The Employment Rights Bill

The Employment Rights Bill (“the Bill”) builds on these developments and signals a further strengthening of family-related rights. At this stage, the Government has made it clear that it intends to expand statutory protections as follows:

1. Enhanced protection against dismissal for pregnant against dismissal for pregnant employees / new parents

The Bill proposes to strengthen protection against dismissal for pregnant employees, new parents and those taking statutory family-related leave, including neonatal care leave and pregnancy-loss bereavement leave.

In relation to pregnant employees and new mothers, the period of protected employment could be extended. This is still in consultation with proposals suggesting the protected period spans 18 months from the birth of the child or 6 months from the return to work (i.e., the end of maternity leave).

The aim is to ensure that returning to work does not immediately place employees at risk of redundancy during a particularly vulnerable period.

2. Bereavement leave for pregnancy loss

One of the most prominent proposed changes is to extend statutory bereavement leave to cover pregnancy loss, including miscarriages before 24 weeks. This new right would give employees formal time off to grieve, rather than relying on sympathetic managers or annual leave. The duration, notice requirements and whether the leave is paid remain under consultation. This change is expected to take effect in 2027.

3. Paid carer’s leave

The Bill proposes to convert the above current one-week unpaid entitlement into paid leave at the employee’s normal pay rate.

This may lead to increased payroll costs and a potential increase in employee’s taking carer’s leave. It is essential that employers have clearer systems for managing and recording care-related absences.

There is currently no confirmed implementation date for paid carer’s leave. The earliest commencement date based on the Government’s implementation roadmap is April 2026, however paid carer’s leave is not presently identified as part of that tranche.

4. Day one rights for paternity and parental leave

The Bill proposes to expand paternity leave and unpaid parental leave so that they become available from the first day of employment, removing the current service-based eligibility thresholds. These measures will take effect in April 2026.

In practice, this means a new starter may qualify almost immediately which is something employers will need to factor into workforce planning.

5. Flexible working

It is proposed that where an employer refuses a flexible working request, they must give a written and reasonable explanation for the refusal. The statutory 8 business grounds for refusing a request remain the same, however the requirement for justifying a rejection is a new development under the Bill. This change is expected to take effect in 2027.

Therefore, the change reflects that flexible working will become the default from day one and a normal working arrangement unless there is a clear business justified reason to not allow it.

It is important to note that these proposed changes are not yet final. Although the Government has set out its commitment to the family related reforms, the detail and timing remain subject to consultation and secondary legislation. The Bill is progressing through Parliament, and the Government aims for Royal Assent in late 2025.

Implications For Employers

These relatively new changes and the proposals under the Bill represent a much more complex and protective family friendly framework.

Employers should ensure:

• their policies accurately reflect the recent changes of the new neonatal care regime and carer’s leave entitlement;
• payroll systems are adjusted to accommodate the revised statutory rates and eligibility rules for neonatal pay or carer’s leave if/when this change comes into effect;
• managers have appropriate training and clear guidance on how to respond to leave requests, particularly in sensitive circumstances such as neonatal care or pregnancy loss; and
• absence management procedures and record keeping are place and regularly updated.

To discuss the contents of this article, contact our employment team via the form below.

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