Inheritance Tax Changes Since April 2026: What You Need to Know

If you own a family business, farm, or AIM shares, the inheritance tax rules that protect what you pass on changed on 6 April 2026. Reliefs that shielded these assets from inheritance tax for decades are now capped for the first time. For families who have spent a lifetime building something to pass on, understanding what changed and what to do about it matters more than ever.

Here is what the new rules say, who they affect, and what you can do now that they are in force.

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What changed in April 2026?

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For years, qualifying agricultural and business assets benefited from unlimited 100% relief from inheritance tax under Agricultural Property Relief (APR) and Business Property Relief (BPR). That ended on 6 April 2026.

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Under the new rules, 100% relief applies only to the first £2.5 million of combined agricultural and business property per person (House of Commons Library, 2026). Anything above that threshold drops to 50% relief, which produces an effective inheritance tax rate of 20% on the excess.

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The £2.5 million figure was not the original plan. The cap was initially proposed at £1 million in the 2024 Autumn Budget and faced significant pushback. In late December 2025, the government raised it. According to HM Treasury, the increase "allows spouses or civil partners to pass on up to £5m in qualifying agricultural or business assets between them before paying inheritance tax, on top of existing allowances" (GOV.UK, 2025). This was a meaningful concession, but the cap itself remains a fundamental shift.

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These are the headline inheritance tax changes 2026 that every estate holder with business or agricultural assets needs to understand.

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AIM shares lost ground too

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It is not only farms and family businesses. Shares listed on the Alternative Investment Market (AIM) now qualify for only 50% relief, down from 100%, provided the standard two-year ownership condition is met. AIM shares sit outside the £2.5 million allowance entirely, which means they do not consume any of it and cannot benefit from the 100% slice. If your portfolio includes AIM shares as part of an inheritance tax strategy, the effective rate on death is now 20%.

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Who is actually affected?

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The numbers tell a clearer story than the political debate. HMRC's latest estimate is that around 1,100 estates will pay more inheritance tax in 2026 to 2027 as a result of the changes, including up to 185 estates claiming agricultural property relief (GOV.UK, 2026). Around 85% of estates claiming agricultural property relief are still forecast to pay no additional inheritance tax under the new rules.

For estates that are caught, the financial impact can be substantial. If your business or farm is valued at £4 million, for example, £1.5 million sits above the new cap. At 50% relief, the inheritance tax bill on that excess could reach £300,000.

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What you can do now the rules are in force

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The IHT rate changes are live, but planning is not over. Here is where to focus.

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Get a current valuation

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Most business owners have not had a formal valuation in years. Without an up-to-date valuation, you cannot know whether your estate sits above or below the £2.5 million cap, and you cannot plan effectively. Commission a professional valuation as the foundation for everything else.

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Review your will and succession plan

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If your will was drafted before the APR BPR cap 2026 came in, it almost certainly assumes unlimited relief. The new allowance is transferable between spouses and civil partners, but only if your will is structured to use it properly. Have your will reviewed by a specialist now to avoid wasting the first spouse's allowance on death.

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Understand how the gifting rules now work

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Gifts made more than seven years before death generally fall outside the estate. However, anti-forestalling rules apply: gifts of qualifying business or agricultural property made on or after 30 October 2024 will count against the £2.5 million allowance if the donor dies on or after 6 April 2026 and within seven years of the gift. If you made significant lifetime gifts in late 2024 or 2025 assuming they sat under the old rules, ask a specialist to reassess them under the new regime.

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Review trust arrangements

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If you hold business or agricultural assets in trust, the rules around ten-year anniversary charges and exit charges have changed. Trusts created before 30 October 2024 that held qualifying property on that date are treated more favourably than trusts created after. If you have a trust, have it reviewed before its next ten-year anniversary.

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Know your instalment option

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If your estate faces an inheritance tax bill on business or agricultural property, the option to pay in ten equal annual instalments, interest-free, has been extended to cover all assets qualifying for APR or BPR. For families who want to keep a farm or business intact rather than sell to settle the tax bill, this is a significant planning consideration.

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Reassess AIM holdings

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If AIM shares form part of your inheritance tax planning, the original case for holding them has weakened. A 20% effective rate may still be useful in some portfolios, but AIM is no longer the IHT shelter it once was. Speak to your financial adviser about whether your AIM exposure still meets your estate planning goals.

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The bottom line

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The inheritance tax changes 2026 represent the biggest shift in IHT reliefs in a generation. The £2.5 million cap is more generous than originally feared, but it is still a cap, and combined with the IHT rate changes affecting AIM shares, the planning landscape has changed permanently. The reality of the APR BPR cap 2026 is that families with valuable businesses or land need a current, expert-led plan, not one built for the old rules.

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Speak to a specialist

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The rules are in force, but good planning still makes a significant difference to what your family eventually pays. If you own a business, farm, or significant AIM holdings, get expert eyes on your estate now. WTT's tax specialists work with individuals to assess exposure, restructure where appropriate, and protect what you have built. Contact us today on +44(0)20 3468 0000 or info@wttconsulting.co.uk for a confidential review.

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References

GOV.UK. (2025). Inheritance tax reliefs threshold to rise to £2.5m for farmers and businesses. HM Treasury. https://www.gov.uk/government/news/inheritance-tax-reliefs-threshold-to-rise-to-25m-for-farmers-and-businesses

GOV.UK. (2026). Agricultural property relief and business property relief changes. HM Revenue & Customs. https://www.gov.uk/government/publications/changes-to-agricultural-property-relief-and-business-property-relief/agricultural-property-relief-and-business-property-relief-changes

House of Commons Library. (2026). Changes to agricultural and business property reliefs for inheritance tax (Research Briefing CBP-10181). UK Parliament. https://commonslibrary.parliament.uk/research-briefings/cbp-10181/

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