Alicia Speed, a solicitor in Mincoffs Solicitors' wills, probate and trusts team, outlines the importance of seeking proper estate planning advice in light of upcoming changes.
From April 2026, major changes are coming in respect of business property relief (BPR), which could result in significant inheritance tax bills for business owners.
BPR is an inheritance tax relief which currently allows for qualifying business property or asset to be afforded 100% relief from inheritance tax. Although it is dependent on the type of asset, as in some instances the asset may only qualify for 50% relief, currently there is no limit to the amount which can be claimed, providing it successfully qualifies as BPR.
From April 2026, the Government have confirmed there will be a limit on the value of the relief to be obtained by each individual. Therefore, anything above £1,000,000 will only receive a 50% relief. Considering the current rate of inheritance tax at 40%, this will mean inheritance tax will be payable at 20% on all business assets over the £1,000,000 threshold.
While individuals would previously have benefitted from passing their businesses through generations free of inheritance tax, the incoming changes mean this will no longer be possible.
If you are relying on BPR to enable you to pass business assets on to the next generation tax efficiently, then this is something that requires careful and proper planning to ensure your estate is not subject to a significant tax bill after your death.
Effective estate planning can help you to navigate the upcoming changes and structure your business efficiently now. Working alongside accountants and financial advisors, a solicitor would assist with the drafting of wills, trusts or other documentation to assist with business succession in the most tax efficient way. Delaying estate planning can result in a significant loss of flexibility, and therefore there are a number of options, depending on what suits your family and business.
In July 2025, HMRC received a record high of £844 million in inheritance tax receipts. Now, more than ever, inheritance tax is being paid on a greater percentage of estates after the October budget introduced some changes to the exemptions and reliefs previously available.
It is imperative to consider your current estate planning ahead of the changes being introduced in April next year, as effective estate planning could save thousands being paid out of your estate in tax upon your death.
Seeking proper estate planning advice in relation to passing on wealth, especially where businesses are involved, can help to make sure you don’t fall foul of upcoming changes.
The private client team at Mincoffs Solicitors have expertise in all areas of wills, probate and trusts, with particular expertise when it comes to estate planning.
For more information or to book an appointment with one of the team, probate@mincoffs.co.uk or call the Jesmond office on 0191 281 6151.
www.mincoffs.co.uk