Sam Hart examines the new business property relief rules and considers how they affect will planning with spouses.
The changes to inheritance tax (IHT) business property relief (BPR) are effective from 6 April 2026, but even those clients with relatively small businesses who think they are not affected by the new restrictions to business property relief should review their existing wills and consider lifetime gifting as part of IHT planning.
BPR has been around for quite some time. Its original intention was to prevent family businesses from needing to be sold to pay IHT when the owner died, thereby allowing the business, if not the erstwhile proprietor, to live on.
However, changes in the Autumn 2024 Budget mean that, even for business owners who might not think they are affected by the new rules, some planning might be in order, to prevent unnecessary tax bills.
