5 min read
What is Business Property Relief (BPR)?
Business Property Relief (BPR) can significantly reduce inheritance tax (IHT) payable when a person dies, or in some instances, when a person gifts assets to another person or to a trust during their lifetime. While it is typically used by business owners, BPR can also be valuable for investors who hold shares in qualifying companies, allowing them to benefit from potential IHT relief without running a business themselves.
It’s a long-standing tax relief, and it remains to this day. However, the rules for BPR are due to change significantly from 6 April 2026. Among other things, these currently unlimited reliefs will be subject to a £2.5 million allowance for the value of property that can benefit from 100% relief. This allowance will renew every seven years.
How Business Property Relief currently works
Under the current system, your beneficiaries can claim BPR on eligible assets in a qualifying company, provided you:
Held them for at least two years before you died
Still held them at the time of your death
That’s a considerably shorter timeframe than other popular IHT planning tools, which can take up to seven years before benefiting from full IHT relief. There is currently no upper limit on the value of assets that can qualify for BPR.
You can claim 100% BPR on: - A business or interest in a business - Shares in an unlisted company, including those listed on the AIM - EIS
| You can claim 50% BPR on: − Shares controlling more than 50% of the voting rights in a listed company − Land, buildings, or machinery owned by the deceased and used in a business they were a partner in or controlled − Land, buildings, or machinery used in the business and held in a trust that it has the right to benefit from |
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Business Property Relief is set to change from April 2026
The government announced wide-ranging IHT reforms in the 2024 Autumn Budget, and the changes to BPR are set to come into effect from 6 April 2026. Here are the key changes and what they could mean for you
£2.5 million allowance for the full 100% relief - Under the current rules, there is no upper limit on the value of assets that can qualify for BPR. However, from April 2026, you will have a £2.5 million limit on the assets that qualify for 100% BPR
Unlisted shares will only be eligible for 50% relief - The current rules allow unlisted companies, including those on the AIM, to qualify for 100% relief. However, from April 2026 those shares will only qualify for 50% relief, regardless of the £2.5 million allowance.
Initially, the new allowance was not going to be transferable between partners. However, in the 2025 Autumn Budget, the government adapted the rule and now it will be transferable. This means that, with careful planning, you and your spouse or civil partner can pass up to £5 million of assets with 100% BPR.
It’s important to note that this allowance is also applicable to BPR-qualifying assets held in trust. So, any eligible assets you put in trust still count towards your £2.5 million allowance.
Important points to consider for Business Property Relief - To benefit from BPR, certain conditions must be met, and even small changes to how a business operates can affect eligibility. So, watch out for these common pitfalls. − You must have owned the qualifying assets for at least two years before your death − You must still own the qualifying assets when you die − The assets must pass the “wholly or mainly trading” test, which means that at least 50% of the business’s activities must come from trading goods or services and not investing − Businesses that primarily deal with investments, securities, stocks, land, or property generally do not qualify |
How Business Property Relief fits into wider estate planning
It’s important to remember that BPR is only one component of your estate plan, and that you can use it alongside other tools and strategies. For example, making full use of your nil-rate bands is the simplest way to mitigate IHT on your estate. When combined with other strategies, this can significantly reduce the amount of your estate liable for IHT.
Helping you plan ahead
BPR can be very effective for mitigating IHT, but it’s also complex and the upcoming rule changes could affect your standing. A financial planner can support you and your family at every stage of using BPR for IHT mitigation They’ll tailor their advice to your circumstances so you can plan with confidence. By helping you and your loved ones understand how BPR works, they can help preserve your legacy for future generations.
Tools and further support
👉 Click here to read our Business Property Relief Guide
Alternatively, leave your details in the form below and one of our team will be in touch for a no-obligation conversation.
Please note
Please note This guide is for general information only and does not constitute advice. The information is aimed at retail clients only. The Financial Conduct Authority does not regulate advice on taxation, Trusts, Estate Planning, or Will writing.
The content was accurate at the time of writing, changes in circumstances, regulation and legislation after the time of publication may impact on the accuracy of the guide.
This information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change and tax implications will be based on your individual circumstances.
You should seek legal advice to ensure that your Will reflects your wishes and is legally binding.
Important information
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Succession Wealth Management Ltd is registered in England and Wales at The Apex, Brest Road, Derriford Business Park, Derriford, Plymouth PL6 5FL. Registered Number 07882611.
FP2026-096b - last reviewed March 2026
