What Families Need to Know Ahead of April 2026
The Government has published draft legislation outlining the details behind the significant reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR) that were announced at the Autumn Budget 2024.
The proposed reforms - set to take effect from April 2026 - will have major implications for family businesses and their succession strategies. However, with early planning and expert advice, the impact of the reforms can be mitigated.
At Dains, our specialist teams are already collaborating with clients to assess the implications and identify opportunities to safeguard family businesses, support succession, and protect wealth.
Key points:
A new £1 million per person allowance will apply to assets qualifying for 100% APR or BPR, resulting in an effective 0% inheritance tax rate within this allowance.
Qualifying assets above the £1 million threshold will attract 50% relief, resulting in an effective 20% inheritance tax rate.
Trusts will also benefit from a £1 million allowance; for those created on or after 30 October 2024, the allowance will be shared across all trusts set up by the same settlor.
Quoted shares on certain markets (such as AIM) will only qualify for 50% relief.
What you need to know:
The £1 million allowance is not transferrable between spouses or civil partners.
The £1 million allowance will be frozen until the 2029/30 tax year, after which it will increase in line with the Consumer Prices Index.
Inheritance tax instalment payment options will remain available for assets qualifying for APR and BPR.
How we can help:
These reforms will reduce the inheritance tax advantages currently afforded to family businesses, owners of large estates and trust structures, and could have a significant impact on family wealth, succession planning, and business continuity.
Early planning is recommended to review the impact of these reforms, so action can be taken prior to April 2026, if required. At Dains, we are monitoring developments closely and will continue to provide updates as the reforms progress to ensure clients have the clarity and confidence they need to plan ahead.
If you would like to discuss how these reforms may affect you and your family, please do get in touch with our private client tax team here.