What’s changing?

From 6 April 2026, 100% relief APR and BPR will apply only to the first £2.5 million of qualifying assets. Assets above that threshold will receive 50% relief. For married couples and civil partners, the allowance will be transferable, effectively providing a combined £5 million ’allowance’.

In addition, AIM shares will only qualify for 50% relief, regardless of their value.

For farming families, business owners and high-net-worth individuals, this will represent a significant shift from how inheritance tax planning has worked previously.

How will the APR and BPR changes affect you?

Many existing arrangements were designed around the pre-6 April 2026 rules, when unlimited 100% relief was available. Under the new framework, from 6 April 2026 some of those arrangements may operate differently than originally intended.

As such, it is important for you to re-evaluate:

• Wills
• Existing trusts
• Lifetime gifting or succession planning
• Business and asset ownership structures

Lodders’ experienced Private Client team has developed a new, flexible will structure designed to help our clients adapt to changing inheritance tax rules while ensuring their wishes and succession plans remain clear.

If you already have a will, trust or succession plan in place, our top piece of advice is to book a review with your solicitor as soon as possible to discuss whether your existing plan is still the most efficient, or whether an updated approach may be more beneficial.

Lifetime planning options

Your succession plan should reflect:

• The nature of your assets
• How your business or farm operates
• Your income needs
• Your family circumstances

Good advice always focuses on the bigger picture. As the old saying goes – don’t let the tax tail wag the dog! Booking a review sooner rather than later will help ensure you have time to understand your options and choose the approach that works best for you.

Understanding your assets is more important than ever

Under the new regime, asset ownership and valuation matter more than ever. With this in mind, key questions you need to consider before and during your review include:

• Who owns the land, shares and business assets?
• How are assets structured between family members?
• What value might they have for inheritance tax purposes?
• Will there be sufficient liquidity in the estate to meet any tax liabilities? 

Inaction is not an option

For many families and businesses, doing nothing is unlikely to be the best approach.

This applies particularly to farmers and landowners with agricultural assets, business owners and shareholders, and high-net-worth individuals with significant business or AIM investments. Read our blog on tax and succession planning for farmers for more information.