Business Property Relief has changed – Is your plan still fit for purpose?

Since 6 April 2026, the rules for passing a business to the next generation without a significant inheritance tax bill have changed.

If you own a trading business, hold shares in a family company or are planning to pass control to the next generation, it is worth taking a fresh look at where you stand.

Business Property Relief (BPR) has long allowed business owners to pass on qualifying assets free of inheritance tax.

What has changed?

Under the new rules, 100 per cent relief now applies only to the first £2.5 million of combined business and agricultural property per individual, with any unused allowance passing to a surviving spouse.

Anything above the threshold receives 50 per cent relief, meaning an effective Inheritance Tax rate of 20 per cent on the excess.

Remember: A business that sits comfortably under the threshold today may not stay there. Growth, a property revaluation or a new acquisition can push an estate over the line before you know it.

The value of succession planning

The changes to BPR are why succession planning cannot be a one-off exercise.

A plan built around the old rules, or built once and left untouched, may no longer deliver the outcome you intended.

TWP Accounting’s tax and corporate finance team works with business owners to review ownership structures, gifting strategies and trust arrangements in light of the new rules, so that more of what you have built ends up with the people you intend it for.