From April 2026, the application of inheritance tax relief for family-owned businesses is changing.

New rules for Business Property Relief (BPR) and Agricultural Property Relief (APR) mean that 100% relief from IHT will be capped at £2.5 million, with the married couple allowance increasing to £5 million on top of existing allowances. Above this level, qualifying assets within an estate will be subject to IHT at an effective rate of 20% (a 50% discount on the full rate of 40%). You can read further detail about the changes here.

With the support of our Corporate Partners and Advisors, this page is designed to provide the support and advice you need to manage the succession process in light of the new rules.

Consider the impact

• Understand the rules – ensure you fully understand the proposed changes to BPR / APR and how they apply to your business.
• Estimate the potential cash impact – ascertain what your inheritance tax exposure will be based on the current and projected value of the business, and the shareholding of relevant family members.
• Consider and appoint advisers to support you – determine which tax, legal and financial advisers and engage them early.

Consider options to manage / mitigate exposure

• Assess how any IHT liability could be funded – explore funding routes such as money within the business, personal wealth, debt, sale of equity, life assurance or others.

Agree a plan

• Develop an outline plan – set out the preferred approach, timelines and responsibilities.
• Agree the plan with the family – ensure all relevant family members and stakeholders support the measures proposed.
• Finalise the plan and its details – document the agreed steps, legal structures and implementation timetable.

Implement the plan

• Ensure timely and accurate implementation – complete all actions correctly and on schedule, for example by 5 April 2026 if gifting to a trust.

Monitor the plan

• Review regularly to ensure ongoing alignment – check that the plan continues to reflect the family objectives, remains compliant with any future tax changes and all required filings are completed.