Major Inheritance Tax Changes on the Horizon - Arnold Hill & Co.

On Monday, HM Treasury published draft legislation confirming sweeping changes to the inheritance tax (IHT) landscape and they’re likely to have a significant impact on anyone with material agricultural or business assets. From 6 April 2026, new rules will limit the scope of two key IHT reliefs: Business Property Relief (BPR) and Agricultural Property Relief (APR).

These changes could dramatically increase future Inheritance Tax bills for estates with valuable qualifying assets. But with the right advice and planning, there are still valuable opportunities to protect family wealth.

What’s Changing?

• New £1 million allowance: Individuals and trusts will benefit from up to £1 million of 100% IHT relief across BPR and APR combined.
• Reduced relief for excess: Any value above this cap will now receive only 50% relief.
• Unlisted shares affected: Assets such as AIM-listed shares will only qualify for 50% relief, regardless of value.
• Trust complexity: Trusts created after 30 October 2024 will need to share the £1 million allowance if from the same settlor, and new anti-fragmentation rules will limit the use of multiple trusts to shelter additional value.
• Seven-year refresh cycle: The allowance will reset every seven years - opening potential planning routes through phased gifting.
• APR extension: From April 2025, land under environmental management schemes may still qualify for APR, even if not actively farmed.

What This Means for You:

If you or your family hold significant business or agricultural assets, or you’ve previously relied on BPR or APR to shield those assets from IHT, your exposure may be about to increase.

"Farms, family businesses, AIM investments, and property-owning trusts will all need to review their estate and trust structures in light of these changes," says Justin Moore, Partner at Arnold Hill & Co. 

The government’s new framework aims to target relief more tightly - but in doing so, it introduces complexity and creates uncertainty for many who have acted in good faith under the previous rules.

Planning Opportunities

The good news is that there’s still time to plan. Whether you’re thinking about succession planning, setting up (or reviewing) a trust, or simply want to understand how the rules apply to your situation, now is the time to act.

Our team of specialist tax advisers and estate planners is already working with clients to:

• Optimise use of the £1 million relief cap
• Reassess trust and business structures
• Model future IHT liabilities and cashflow
• Plan efficient gifting and lifetime transfers

Let's Talk

With the rules taking effect in April 2026, the clock is ticking. Early action is key to securing the most favourable outcome under the new system.

Contact us today to arrange a confidential review of your estate, business, or trust arrangements. We’ll help you stay ahead of the changes and make informed, proactive decisions for the future. Get in touch via info@arnoldhill.co.uk or call us on 0207 306 9100.

Author, Justin Moore - Partner

Justin.Moore@ArnoldHill.co.uk