Inheritance Tax Changes from April 2026: What Business Owners Need to Know

Significant changes to the UK’s Inheritance Tax (IHT) regime came into effect on 6 April 2026, bringing important implications for business and agricultural owners across the country.

Under the new rules, long-standing full reliefs for Business Property Relief (BPR) and Agricultural Property Relief (APR) are no longer unlimited. Instead, they are now capped at a combined allowance of £2.5 million per individual. Assets above this threshold will only qualify for 50% relief, effectively resulting in a 20% inheritance tax charge on the excess value.

For married couples and civil partners, unused allowances can be transferred, potentially allowing up to £5 millions of qualifying assets to be passed on with full relief.

Experts say the changes could significantly affect succession planning for family businesses, particularly those with high-value assets. Owners are being urged to review wills, ownership structures, and long-term business plans to ensure they are prepared for potential tax liabilities on death.

Financial advisers also stress that it is not too late to take action. While early planning may have been beneficial before the changes took effect, ongoing restructuring and tax planning can still help reduce future exposure, especially for estates exceeding the £2.5 million threshold.

The reforms are described by industry professionals as one of the most significant shifts in inheritance tax policy in recent years, with a strong focus now placed on careful estate management and succession planning for business owners.

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