If you’re a business owner, or you’ve built up a portfolio that includes qualifying assets, you might already be familiar with Business Property Relief (BPR).
It’s been a cornerstone of inheritance tax (IHT) planning for years. But from April 2026, the landscape is shifting – and while it’s not cause for panic, it is time to start thinking ahead.
WHAT’S HAPPENING?
Currently, BPR provides unlimited 100% relief from IHT for owners of trading businesses and unlisted company shares, including AIM listed portfolios, provided the qualifying conditions are met.
From 6 April 2026, the government is introducing a £1 million cap on the value of business and agricultural property that qualifies for 100% relief from inheritance tax.
Anything above that will only get 50% relief – which means a potential 20% tax hit on the excess.
While the allowance refreshes every seven years, it can’t be transferred between spouses or civil partners. Trusts holding qualifying assets are also affected, so it’ll be worth reviewing the impact on them too.
For the full technical breakdown, check out the Cooper Parry BPR Hub here.
WHAT DOES THIS MEAN FOR YOUR FINANCIAL PLANNING?
If you’ve got a business, or assets that qualify for BPR, this could have a real impact on your estate planning. For example, a £10 million business interest could face an extra £1.8 million in inheritance tax under the new rules.
But this isn’t about making snap decisions – it’s about starting the conversation. Whatever course of action you choose needs to be considered firstly, as part of your financial plan, including your priorities and future goals for you. And secondly, for your family: how and when you want to transfer wealth to your children and grandchildren.
KEY THINGS TO START THINKING ABOUT
- Timing matters: You’ve got until April 2026 to make gifts of which still qualify; the earlier you start planning on this, the more options you’ll have.
- Don’t make decisions in isolation: BPR is just one piece of the puzzle. It needs to be considered alongside your broader financial planning strategy.
- Review your estate plan: Especially if you’re relying on BPR to reduce your IHT exposure.
- Think about gifting: There may be opportunities to lock in current reliefs before the changes kick in.
- AIM shares and pre-constructed BPR products: It’s not just about business assets; AIM portfolios are also impacted, as too are the myriad of BPR qualifying investment products previously marketed with the key benefit of reducing IHT exposure.
ANY QUESTIONS?
The Cooper Parry Wealth team is here to help you make sense of the upcoming BPR changes.
So, if you’d like to chat through what they mean for you, your business, or your family, don’t hesitate to get in touch.
This communication is for general information only and is not intended to be individual advice. You are recommended to seek competent professional advice before taking any action. The information is based on our understanding of the Autumn Budget 2024 and will be affected by changes in law as well as your residency and domicile status.
