What’s changing?
From 6 April 2026, the current 100% IHT relief for eligible business property will be capped at £2.5m per person. Any value above this threshold will only qualify for 50% relief, potentially creating a substantial tax liability on death.
Why it matters
If your business (or interest in a business or share(s) in an unlisted company) is worth more than £2.5m, these changes could significantly increase the amount of IHT payable by your family. Planning early can help protect your wealth and business.
Key points to be aware of
- Spouse and civil partner transfers – The £2.5m cap will be transferrable between spouses/civil partners on death.
- Valuations are critical – Accurate business, share or land valuations are essential to understanding your potential tax liabilities and highlight where planning might be needed. Specialist valuers are currently in high demand, so engaging them as soon as possible is advised.
- Ownership structure matters – How your assets are owned (personally, in a partnership, or company) can affect both the relief and the planning options available.
- Succession and lifetime planning – Lifetime gifts and succession planning can help reduce tax exposure and minimise the risk of disputes later on.
- Wills may need updating – Existing Wills should be reviewed to ensure they are or remain tax-efficient and aligned with your current business structure and family circumstances.
What you should do now
To stay ahead of these changes, we recommend:
- Arranging up-to-date valuations of your business, shares and land.
- Reviewing ownership structures and considering transfers between spouses. The ownership of a business (even if exempt from IHT in itself), can impact other factors such as whether you qualify for a Residence Nil Rate Band.
- Updating your Will and considering the use of trusts to provide flexibility.
- Speaking to us about lifetime planning to protect your assets and your family’s future.
Why act now?
These changes take effect from 6 April 2026 and implementing effective planning can take time. Starting now gives you the best chance to explore all available options and put the right structures in place well before the deadline.
How TWM can help
Our specialist private client solicitors regularly advise business owners on IHT, succession planning and asset protection.
In addition, our Corporate and Commercial team can advise you on business or company structuring and business or share sales or transfers. We can put you in touch with the appropriate business law specialists and work seamlessly as a team.
For personalised advice on how these changes may affect you, please contact our Private Client team today.