As we’re in the busy final quarter of the tax year, there’s a change worth flagging for anyone thinking about Inheritance Tax and succession planning.
In December, the Government quietly revised its changes to Business Relief (BR). The proposed cap on 100% relief has risen from £1m to £2.5m per person. For married couples and civil partners, the allowance can be shared, meaning up to £5m of qualifying business or agricultural assets could pass free of IHT from April 2026.
This is a meaningful shift from what was set out in the 2024 Autumn Budget, and it followed widespread opposition and criticism from family business owners, entrepreneurs, and farming communities over the real-world consequences of family businesses being lost under the original proposals.
Against this backdrop, the higher 100% Business Relief cap is likely to prompt a reassessment of non-AIM qualifying business assets relative to AIM portfolios, particularly given the reduced relief applying to AIM from April 2026.
For many, the debate has highlighted just how emotionally and financially loaded IHT planning can be, particularly where businesses or livelihoods built over decades are at stake, and where there is a perceived inequity in paying tax on assets already taxed during a person’s lifetime.
A £2.5m cap won’t save every family business. Some will still face difficult decisions, and in some cases, assets may still need to be sold to meet estate liabilities. But it does provide more breathing room than originally proposed, and reinforces the importance of early, proactive estate planning to support successful intergenerational transfers of wealth.
If you’re already reviewing your estate or succession plans, this is a sensible moment to sanity-check assumptions with your advisers.