Selling a business?
Restructuring your company?
Research and development?
Looking for an accountant?
Got an HMRC tax enquiry?
Exiting a business?
Do you have trust tax issues?
Posted: January 15 2026
Why this matters
Inheritance Tax (IHT) reform is firmly back on the political and policy agenda. Proposed changes to Business Property Relief (BPR) and Agricultural Property Relief (APR) from April 2026 represent some of the most significant developments affecting family businesses, landowners and entrepreneurs in many years.
Interestingly, the initial reforms have been radically reformed following lobbying and are now watered down, although the direction of travel remains clear: long-standing reliefs that have historically reduced or eliminated IHT on business and agricultural assets are under increased scrutiny. For many families, this raises fundamental questions about succession, ownership structures and long-term wealth preservation.
The key message is not to panic — but to plan early and deliberately.
Business and Agricultural Property Relief: what is changing?
The current position (in broad terms):
At present, BPR and APR can provide up to 100% relief from IHT on qualifying business and agricultural assets, provided certain conditions are met. These reliefs have been central to enabling:
- Family businesses to pass between generations without forced sales;
- Farms and estates to remain intact; and
- Long-term investment in trading activities rather than short-term tax planning.
With effect from 6 April 2026, these reliefs will be restricted to £2.5m per estate, with the excess value being charged to IHT at 20% (i.e. half of the full 40% rate).
The initial relief restriction of £1m per person has been significantly increased following intensive lobbying, and the ability to transfer the relief between husband and wife has also been introduced.
Planning consequences for families and business owners
Succession planning for family businesses with a value exceeding the joint relief of £5m moves from “someday” to “now”
Many families have historically deferred succession planning, relying on BPR or APR to ensure no IHT will be payable on the second death. As these reliefs become more limited, delayed planning could become expensive.
Early consideration should be given to:
- Who should own assets long-term;
- Whether control and value need to pass at the same time; and
- Whether lifetime transfers should play a greater role.
Post-2026, it is likely that how assets are held will matter at least as much as what assets are held.
Strategic actions to consider now
While no two families are the same, the following steps are increasingly relevant:
- Review whether your business qualifies for BPR in full, don’t assume this is the case;
- Check your IHT exposure;
- Consider lifetime planning options.
How RJP LLP can help
RJP LLP is supporting clients by:
- Reviewing existing BPR and APR positions;
- Modelling the post-2026 IHT position;
- Advising on succession, restructuring and lifetime planning; and
- Co-ordinating tax advice with legal and commercial considerations.
With these reforms on the horizon, early, well-informed planning offers the greatest opportunity to protect family wealth and business continuity.
If you would like to discuss how the proposed IHT reforms may affect your business or family arrangements, please speak to your usual RJP LLP contact or contact partners@rjp.co.uk.
