Will my business pay inheritance tax?

From 6 April 2026, the first £2.5 million of qualifying business and agricultural property gets 100% relief from inheritance tax and anything above gets 50%. The allowance passes to a surviving spouse or civil partner if unused, and AIM shares get 50% relief in all cases.

The rules from 6 April 2026

100% relief to £2.5 million
On the first £2.5 million of qualifying business and agricultural property combined.
50% relief above it
Half the value above £2.5 million is taxed at 40%, an effective rate of 20%.
Transferable
Any unused allowance passes to a surviving spouse or civil partner. Where the first death was before 6 April 2026, the survivor is treated as having the full £2.5 million to transfer.
AIM shares
Shares not listed on a recognised stock exchange, such as AIM shares, get 50% relief whatever the amount.
Trusts
Trusts have a separate £2.5 million allowance.

Source: gov.uk, agricultural property relief and business property relief changes, and Finance Act 2026 section 65, checked 2 October 2026.

A couple can now pass on up to £5 million of qualifying business with no inheritance tax, if the allowances are used in both lifetimes.

Related questions

How much can a couple pass on?

Up to £5 million of qualifying business and agricultural property between them, plus their nil rate bands. gov.uk puts the total at up to £5.65 million.

Does this apply to AIM shares in an ISA?

AIM shares get 50% relief in all cases from 6 April 2026, wherever they are held.

Where this fits

Whether the business, the pension or the house carries the bill depends on the order things pass.

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Sunny Bharj

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Tony Springer

Tony Springer

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