What’s changed in Inheritance Tax (IHT)
From 6 April 2026, certain unquoted shares and securities that are traded on recognised stock exchanges or give control to the transferor will now only qualify for 50% relief under Business Property Relief (BPR) or Agricultural Property Relief (APR). Previously, many of these assets qualified for 100% relief. There are transitional provisions: gifts made between 30 October 2024 and 5 April 2026 may still benefit under the old rules depending on when death occurs. (gov.uk)
Who should review their plans immediately
- Individuals holding shares listed on recognised stock exchanges but treated as unquoted under BPR rules (e.g. AIM listings).
- Trust and estate planners using unquoted share gifts in gift-and-will strategies.
- Business owners considering gifting control or ownership portions whose valuations are rising rapidly.
Example scenarios
- Scenario A: Alice owns shares in an AIM-listed company; she had planned to gift £1 million in shares to her children, counting on 100% relief. Under new rules, only 50% of that value may be relieved — doubling the IHT cost on those assets.
- Scenario B: Bob transferred unquoted shares pre-budget; he died within the 7-year period after 30 October 2024. Transitional rule may allow old relief for those specific transfers.
What you can do to adapt
- Review your trust deeds and gifting arrangements now; assess which assets qualify under new criteria.
- Consider alternative assets which retain 100% relief — e.g. assets not traded on recognised exchanges or not giving control.
- Plan to use the transferable 100% relief allowance between spouses/civil partners to optimize exposure.
- Reassess valuations: higher valuation thresholds may trigger relief reduction, so accurate valuations and timing matter.
Implications for cross-border and non-UK domiciled individuals
- With resident-based regime replacing domicile rules, and IHT relief changes, non-residents or those with UK trusts must review exposure carefully.
- Conversations with solicitors, tax advisors, or wealth planning professionals are more critical than ever.
Take-home points
The reduction to 50% relief marks a significant shift for those using unquoted shares in estate or business succession planning. With these changes now in force, there is no time to wait: review your assets, gifting plans, trusts, and make strategy adjustments before future tax and valuation developments erode options further.