If you've been under the impression that Inheritance Tax (IHT) changes are a distant concern, it's time to reconsider. Recent reforms are set to significantly impact business owners and farmers, particularly those with businesses or farms with values exceeding £1 million. The changes to Business Property Relief (BPR) and Agricultural Property Relief (APR) could have profound implications for your estate planning. Whilst, the impact of the APR changes for farmers has been in the headlines for IHT changes next year, the changes to BPR for business owners is just as crucial.
What’s changing?
Let’s break it down, BPR has been a lifeline for family-owned businesses allowing shares in qualifying businesses to be passed down free of Inheritance Tax. However, the goal posts have shifted and the government has announced that [from 6 April 2026] 100% BPR will be limited to the first £1m of qualifying assets with a rate of 50% thereafter.
These changes mirror the changes to APR. These changes could mean that a portion of your estate is going to become taxable.
Could this affect you?
Your IHT liability could be significantly increased if your business or farm has assets exceeding £1 million as of April 2026. Therefore, we recommend you consider the following:
- Estate Valuation
- Succession Planning
- Trust Structures
Aaron Hemmington, Tax Partner at Hawsons said, “The proposal for April 2026 IHT changes are creating lots of uncertainty for business owners and farmers. Acting now means you have time to explore structures and futureproof your business or estate. ”
Where Hawsons come in?
We work closely with business owners from all sectors including but not limited to farms and family-run businesses helping them to understand the proposed changes. We will offer practical, pro-active solutions with a clear view of where you stand. Still unsure if it affects you, contact aaronhemmington@hawsons.co.uk or call 01604 645600.
Aaron Hemmington
Tax Partner, Northampton