UK Business Property Relief to be capped in 2026

New regulations regarding Business Property Relief (BPR) in the United Kingdom will take effect on 6 April 2026. These changes introduce a cap on the inheritance tax relief previously available to company owners passing on trading businesses.

Under the new rules, a 100% relief rate will apply only to the first £2.5 million of qualifying business and agricultural property per person. For assets valued above this threshold, the relief will be reduced to 50%, resulting in an effective inheritance tax rate of up to 20% on the excess, rather than the standard 40% rate.

This cap replaces a previous system that allowed for unlimited qualifying value. Inheritance tax on these assets may be paid in equal, interest-free installments over a 10-year period.