UK Business Property Relief BPR Inheritance Tax Guide 2026

Comprehensive 2026 estate-planning guide for UK business owners: Business Property Relief (BPR), the £2.5 million allowance for 100% relief on qualifying business and agricultural property, 50% relief above the allowance, AIM/non-listed share changes and qualifying conditions.

1. BPR Relief Rates & Qualifying Asset Classes

Business Property Relief (BPR) can reduce the value of qualifying business property for Inheritance Tax purposes. From 6 April 2026, 100% relief is available within a **£2.5 million allowance** for qualifying business and agricultural property combined, with qualifying value above the allowance generally receiving relief at **50%**. The allowance can be transferable between spouses or civil partners subject to the statutory conditions. The 2026 reforms also reduce BPR to 50% for certain shares traded on recognised exchanges that HMRC treats as 'not listed', including qualifying AIM shares. The precise relief depends on the asset type, ownership period, trading conditions and the new allowance rules.

Business Asset Category	Statutory BPR Relief Rate	Key Qualification Condition
Sole Trader Business / Partnership Interest	100% relief within the £2.5 million combined allowance; 50% relief can apply above the allowance	Must satisfy the statutory business-property and ownership conditions, including the relevant 2-year period
Unquoted Shares in Trading Company	Generally 100% relief within the £2.5 million allowance, subject to the statutory conditions	Company must satisfy the trading-business conditions and the shares must meet the relevant ownership and excepted-asset rules
Land, Buildings or Plant personally owned and used by a qualifying business	Generally 50% BPR	Specific ownership and use conditions apply, including the required relationship with the business or company

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Key Takeaways

From 6 April 2026, 100% BPR applies within the £2.5 million combined allowance for qualifying business and agricultural property, with qualifying value above the allowance generally receiving 50% relief.
The £2.5 million allowance can be transferred to a surviving spouse or civil partner subject to the statutory rules.
The relevant business-property ownership conditions generally include a 2-year period, subject to specific exceptions and replacement-property rules.
Businesses mainly dealing in securities, stocks, shares, land or buildings, or holding investments are generally excluded unless the statutory trading-business conditions are satisfied.
From 6 April 2026, qualifying shares traded on markets treated as 'not listed', including AIM shares in relevant cases, generally receive 50% BPR rather than 100%.
BPR is subject to detailed rules for excepted assets, lifetime transfers, trusts and the interaction with Agricultural Property Relief.

Related UK Business & Corporate Guides

UK Sole Trader vs Limited Company Tax & Liability Guide →UK Business Asset Disposal Relief BADR 18% Tax Guide →

Frequently Asked Questions (6 Interlinked FAQs)

From 6 April 2026, 100% Business Property Relief is available on the first £2.5 million of combined qualifying business and agricultural property, subject to the statutory rules. Qualifying value above the allowance generally receives 50% relief.

Yes. An unused BPR/APR 100% allowance can be transferred to a surviving spouse or civil partner subject to the statutory conditions, potentially allowing up to £5 million of qualifying property to receive 100% relief between the couple.

Qualifying shares in a trading company can receive BPR, subject to the trading, ownership, excepted-asset and other statutory conditions. From 6 April 2026, certain shares traded on markets treated as 'not listed' receive only 50% relief.

Generally no. From 6 April 2026, qualifying shares traded on a market that HMRC treats as 'not listed', such as AIM in relevant circumstances, are subject to 50% BPR rather than the previous 100% rate.

The qualifying property generally must have been owned for at least 2 years immediately before the transfer, subject to statutory exceptions and replacement-property rules.

Businesses mainly dealing in investments, securities, stocks, shares, land or buildings are generally excluded from BPR. Whether a particular business is mainly an investment business depends on the detailed statutory and factual tests.