Inheritance Tax Business & Agricultural Relief Compliance Check

From 6 April 2026, the 100% rate of Inheritance Tax relief under Business Relief (formerly Business Property Relief) and Agricultural Relief is capped at a combined £1 million of qualifying assets per person. Anything above that threshold — trading business assets, farmland, or AIM-listed shares — only receives 50% relief, giving an effective IHT rate of 20% on the excess instead of the previous 0%. This is one of the biggest changes to succession planning for UK family businesses and farms in a generation, and many owners have not yet reviewed their wills, shareholder agreements, or life insurance cover against the new cap.

The change applies per individual, so married couples and civil partners can potentially plan to use two £1 million allowances, and the allowance cannot be transferred between spouses in the way the nil-rate band can. Business owners who assumed their company or farm would pass on free of Inheritance Tax may now face a significant liability on death, payable in cash within six months (though instalment options exist for some assets). HMRC has confirmed the allowance will not increase with inflation, meaning more estates are pulled into the 20% band each year. Getting professional advice on trusts, lifetime gifting, and insurance-backed planning is essential for any business owner or farmer with assets near or above the threshold.

Use this free tool to check how the reformed £1 million cap on Business Relief and Agricultural Relief for Inheritance Tax affects your business, farm, or shareholding — and what succession planning steps to prioritise.