LWA Blog: Inheritance tax changes for business owners
News 12 February 2026
Inheritance tax (IHT) planning has long been a cornerstone of protecting family businesses and farming assets for future generations. However, significant changes are on the horizon that will alter how much relief business owners and farmers can rely on.
From 6th April 2026, reforms to key IHT reliefs will come into force. While there is some welcome flexibility for married couples and civil partners, the overall position means that advance planning has never been more important.
In this blog, we explain what’s changing and what business owners should be thinking about now.
What are business property relief and agricultural property relief?
Business Property Relief (BPR) and Agricultural Property Relief (APR) are long-standing IHT reliefs designed to help family businesses and farms pass to the next generation without being forced to sell assets to pay a tax bill.
Currently, qualifying business or agricultural assets can attract up to 100% relief from inheritance tax. This means that, in many cases, the full value of a trading business, shares in a company, or agricultural land can be passed on free of IHT.
What is changing for BPR and APR from April 2026?
As confirmed by the government, both APR and BPR will be reformed from 6 April 2026. The key change is the introduction of a combined lifetime cap:
- Up to £1 million of qualifying agricultural and business property will continue to benefit from 100% relief
- Any value above this threshold will only qualify for 50% relief.
This cap applies across both APR and BPR together, not separately. For business owners with valuable trading companies, and for farmers with land and buildings that have increased significantly in value, this could lead to a much higher IHT exposure than expected.:
How the Budget 2025 softened the impact for couples
There was some positive news in Budget 2025. From April 2026, any unused APR or BPR allowance will become transferable to a surviving spouse or civil partner.
This means that, with careful planning, couples may be able to pass on up to £3 million of qualifying business or agricultural property free from inheritance tax:
- £1 million at 100% relief for the first estate
- A further £1 million at 100% relief transferred to the surviving spouse or civil partner
- Plus, the benefit of the 50% relief on values above the cap.
While helpful, this still represents a major shift for families who were previously expecting full relief on all qualifying assets.
What do the BPR and APR changes mean for business owners and farmers?
These changes are particularly significant for:
- Owners of family-run trading businesses
- Shareholders in unquoted companies
- Farmers with land, farmhouses, and agricultural buildings
- Families relying on APR or BPR as a core part of their estate planning.
Asset values have risen sharply over recent years, especially agricultural land. As a result, many estates that previously fell comfortably within full relief could now face a sizeable inheritance tax bill.
Why gifting before April 2026 may not be straightforward
With only a couple of months to go until the new rules take effect, now is the time to review your estate planning strategy. This includes:
- Reviewing business and farm ownership structures
- Considering succession plans and wills
- Assessing exposure to inheritance tax under the new limits
- Exploring legitimate planning options well ahead of April 2026.
Every situation is different, particularly where businesses or agricultural assets are involved.
LWA are here to support business owners with the changes to Inheritance Tax
At LWA, we work closely with business owners and farming families to help protect what they’ve built and pass it on efficiently.
If you own a business or agricultural property and would like to understand how the upcoming inheritance tax changes could affect you, please speak with us. Early advice can make a meaningful difference to the options available. Contact our team on 0161 905 1801 in our Manchester office, or 01925 830 830 in Warrington, or you can email mail@lwaltd.com.
