As referenced above, APR only reduces the agricultural value of the agricultural assets.
It can be common for farmland to be eyed up by developers and therefore have "hope" value or development value or for people wanting to move from the city and "escape to the country" being willing to pay over the odds for a rural lifestyle.
In these cases, the true value of the property would exceed its agricultural value.
APR would not apply to this excess value, but BPR may be available instead, and the rate available would either be 100% on a business or interest in a business (for example, a partnership share) and 50% on land, buildings, plant or machinery owned by the transferor and used wholly or mainly for the purposes of a business carried on by him, or a partnership in which he was a partner (as long as the underlying business/partnership interest also qualifies for BPR).
To qualify for BPR, the business interest/property must have been owned by the transferor throughout the two years before the transfer, although there are exceptions, e.g. if the property is transferred between spouses on death, where the survivor is credited with the ownership period of the first to die.
The underlying business must also have been carried on for a gain and must not have consisted wholly or mainly in dealing in securities, stocks or shares, dealing in land or buildings or making or holding investments.
This should not be an issue for farms that are actively farmed.
As with APR, BPR will generally not be allowed where the property is subject to a binding contract for sale.
BPR will also be clawed back if the property is transferred by way of a lifetime gift and the transferor dies within seven years of the gift unless certain conditions are met.
Where property qualifies for APR and BPR, APR will always be applied first to the agricultural value, and BPR would then be applied to any additional value over and above the agricultural value.
APR and BPR are applied before the NRB and RNRB, meaning that farming estates commonly pass free of Inheritance Tax.