BUSINESS PROPERTY RELIEF 2026: IHT CHANGES, GUIDANCE & PLANNING
BPR is changing from 6 April 2026 – and the impact could be huge. This hub is your go-to resource for clear updates, expert tax planning advice, and strategies to protect your legacy.
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BUSINESS PROPERTY RELIEF IS CHANGING. BIG TIME
From 6 April 2026, the rules around BPR are getting a major shake-up. Whether you’re a business owner, trustee or planning succession, now’s the time to act to avoid any negative financial impacts.
BPR being capped at £2.5 million for 100% relief, with any excess only qualifying for 50% relief is the headline grabber, because it means a potential 20% Inheritance Tax (IHT) charge on business assets above the threshold.
There’s more you need to know – and we’ve broken it down for you. What’s changing? Who’s affected? And what should you be doing now to get ready?
Our team explain it all in these short videos – watch now.
Since filming, the Government have increased the maximum combined BPR/APR allowance eligible for 100% relief from £1m to £2.5m
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BPR is a valuable Inheritance Tax (IHT) relief that reduces the taxable value of “relevant business property”. It’s long been a cornerstone of smart succession planning, because under the current rules, relief is provided at 100% or 50%, depending on the asset.
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Currently, BPR provides unlimited 100% relief from IHT for owners of trading businesses and unlisted trading company shares, provided the qualifying conditions are met. But the headline changes include:
- £1 million allowance: 100% relief will be capped at £1 million on a combined value of qualifying business and agricultural property
- 50% relief above £1 million: Any value above £1 million will receive relief at 50% (i.e., an effective IHT rate of 20%)
- The £1 million allowance refreshes every seven years.
- As announced in the Autumn Budget 2025, any unused allowance on death can transfer to the surviving spouse.
- Property settled into trust: Where an individual settles property into more than one trust on or after 30 October 2024, there will be a single £1 million allowance, with rules applicable to how that allowance is split between the trusts. Trusts that were in existence before 30 October 2024 are understood to have a separate £1 million allowance.
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The changes could significantly increase IHT liabilities. For example:
- A £3 million business interest could face an additional £400,000 in IHT
- A £10 million interest could see a £1.8 million increase
- At £50 million, the extra tax could reach £9.8 million
These figures are illustrative, but they highlight the scale of impact for high-value estates and why planning early is so important to help mitigate this.
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Yes. Qualifying BPR assets can be paid for in equal, interest-free instalments over ten years, easing the financial burden on beneficiaries.
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Start by:
Review your current position:
Consider the value of your business assets and check that they qualify for Business Property Relief – don’t assume that that relief will be available
Quantify your exposure to IHT:
By establishing how the new rules will apply to your estate, based on your existing plans and wills
How will the IHT be funded by your beneficiaries?
Understand and consider the funding options, including any tax liabilities that may arise to implement them, so that a clear plan is in place to support your beneficiaries
Consider your succession plan and how a lifetime gifting strategy fits within this:
The increased exposure may lead you to accelerate your succession plans. In these circumstances, trusts can play a part in allowing you to retain a level of control and protection, whilst removing value from your estate
Look to make gifts now, either outright or into a trust:
This may be of current or future value to cap the exposure increasing
Is there a sale on the horizon?
If you are thinking of selling your business interest pre-6 April 2026, or within the next five years, there is planning that you should consider now
Review your will:
This may need updating to ensure the best position is achieved
Review all existing trusts:
Understand the impact of the new rules on trusts that are holding business interests and consider the options available
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Lifetime gifting can be a powerful tool for reducing your Inheritance Tax (IHT) exposure especially ahead of the 2026 BPR changes. Here’s why:
- Start the seven-year clock: Gifts fall outside your estate after seven years, so acting early maximises the chance of full IHT relief.
- Maximise the £1m BPR allowance: Gifting business assets to multiple family members or trusts can spread the relief and reduce overall exposure.
- Unlock minority discounts: Splitting shares can reduce their taxable value, as minority holdings are typically worth less for IHT purposes.
- Retain control via trusts: You can gift into a trust (excluding yourself as a beneficiary) while still acting as a trustee—keeping control without inflating your estate.
- Freeze your estate’s value: By capping your share value and passing future growth to others, you can limit IHT without triggering the seven-year rule.
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Our Private Client Tax team offers holistic support – from valuing your business and reviewing reliefs to implementing gifting strategies and managing legal paperwork. We’ll help you plan smart, act early, and stay ahead of the changes.
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