UK inheritance tax reform drives wealthy to seek investment reliefs

The United Kingdom’s inheritance tax (IHT) rules are changing. From April 2027, pension savings will be counted as part of an estate for IHT purposes, ending the long‑standing exemption. At the same time, reliefs for agricultural and business property are being limited to a combined £2.5 million per individual, meaning many family‑owned farms and businesses could face tax bills that exceed their cash flow.

These changes are prompting families to reassess succession plans, consider early gifting, trusts, restructuring ownership, or even the sale of assets to raise cash for the tax liability. Financial advisers also note a growing interest in the Enterprise Investment Scheme (EIS), a government‑backed programme that offers 30 % income‑tax relief, exemption from capital‑gains tax, and Business Relief for IHT when shares are held for at least two years. The scheme is aimed at sophisticated investors who can tolerate higher risk, with minimum commitments of around £25,000 and lock‑in periods of four to eight years.