The UK government’s upcoming Inheritance Tax (IHT) changes in 2026 will significantly impact Business Property Relief (BPR) and Agricultural Property Relief (APR), making estate planning more complex. At Cogency Chartered Accountants, we help individuals and businesses in Swinton, Salford, and Manchester navigate these changes to ensure they minimise their tax liabilities.
What’s Changing in 2026?
In October 2026, the UK government will halve the maximum relief for BPR and APR. Additionally, from 2027, there are proposals to include written-in-trust pension pots in a deceased’s taxable estate. These changes will particularly affect high-net-worth individuals who rely on these reliefs to reduce their inheritance tax exposure.
- BPR and APR Reduction: The halving of these reliefs means more estates will be subject to higher IHT liabilities.
- Trust-Based Pension Taxation: Trust-based pension funds will no longer be fully exempt from IHT, making long-term estate planning even more critical.
If you need expert inheritance tax advice in Swinton, Salford, or Manchester, our team at Cogency Chartered Accountants is ready to assist.
Maximising Business Property Relief Under the New Rules
Despite the changes, BPR remains a crucial tool for estate planning, particularly for those who hold business assets. Proper structuring can still provide significant tax relief, but careful planning is required.
1. Investing in IHT-Efficient Assets
Many high-net-worth individuals prefer to invest in property, but direct property investments do not qualify for BPR. However, alternative investment strategies exist:
- Trading Businesses: Investing in asset businesses like hotels that qualify for BPR and AIM-listed companies.
- Family Investment Companies: Structuring family wealth through corporate or trust setups to maximise tax efficiency.
2. Using a Finance Company for Investments
Setting up a finance company to fund investments in other businesses can ensure that the capital still qualifies for BPR. The 2006 case of Executors of Rhoda Phillips v HMRC established that intercompany loans do not count as investments, allowing wealth to be structured more efficiently for IHT purposes.
At Cogency Chartered Accountants, we advise clients on how to structure their businesses to maximise tax relief and avoid costly mistakes.
3. Optimising Existing Business Structures
If you already have a trading company, you can:
- Set up a lending trade within your company and use that cash for investments in connected companies while maintaining BPR eligibility.
- Assess existing arrangements—you may have inadvertently created a structure that already meets BPR criteria, offering opportunities to place assets in trust before the 2026 deadline.
For businesses in Swinton, Salford, and Manchester, our tax specialists can help you explore these options before the rule changes take effect.
Next Steps: Secure Your Tax Position Before 2026
The upcoming changes make early tax planning essential. High-net-worth individuals and business owners must act now to protect their estates from unnecessary tax burdens. At Cogency Chartered Accountants, we specialise in IHT mitigation, business structuring, and tax relief strategies tailored to your specific circumstances.
Get Expert Guidance from Cogency Chartered Accountants
If you’re based in Swinton, Salford, or Manchester and want to understand how these IHT changes will affect you, speak to our team today. Contact Cogency Chartered Accountants for expert advice on maximising BPR and minimising inheritance tax liabilities.