IHT Business Property Relief (BPR) Calculator
BPR reduces or eliminates IHT on business assets. 100% relief applies to unquoted shares and business interests; 50% to listed shares and land used in a business. From April 2026, a combined £1M cap applies to BPR and APR.
100% BPR Assets
50% BPR Assets
Frequently Asked Questions
What is Business Property Relief (BPR)?
BPR is an IHT relief that reduces the taxable value of qualifying business assets. 100% BPR applies to unquoted trading company shares, partnership interests, and sole trader businesses. 50% BPR applies to quoted controlling shareholdings and land/buildings used in the business.
What are the Budget 2024 BPR changes?
The Autumn Budget 2024 announced a £1M combined cap on 100% BPR and APR (Agricultural Property Relief) from April 2026. Business assets above £1M will only receive 50% BPR. This significantly increases IHT on large business estates.
Do AIM shares qualify for BPR?
Yes. AIM shares in qualifying trading companies have been eligible for 100% BPR after 2 years of ownership. This made AIM a popular IHT planning tool. The £1M cap from April 2026 reduces this benefit for larger portfolios.
What is the 2-year ownership rule?
BPR requires the business asset to have been owned for at least 2 years before death. Assets acquired within 2 years of death do not qualify for BPR. Replacement assets can count their combined ownership period in some cases.
What businesses qualify for 100% BPR?
Qualifying businesses: trading companies (not primarily investment); partnerships; sole traders; interests in trading businesses. Investment businesses (property letting, stocks portfolios) generally do NOT qualify. 'Wholly or mainly' trading test applies.
Does a buy-to-let portfolio qualify for BPR?
Generally no. Rental properties are investment activities, not trading activities. BPR is specifically for trading businesses. However, a property management business with significant additional services may qualify — this is a grey area.
Can farmland qualify for both BPR and APR?
Agricultural land qualifies for APR (Agricultural Property Relief) rather than BPR. Farmhouses used by farmers can qualify for APR. Farmland with additional commercial diversification may have a BPR element. Under Budget 2024 changes, BPR and APR share a £1M combined cap from April 2026.
What happens if the business is partly trading and partly investment?
If a company is 'wholly or mainly' trading (50%+ of activity/assets/income), the entire company qualifies for BPR. If the business is mainly investment, BPR is denied entirely. The mainly trading test is applied holistically.
Does BPR apply to life insurance policies in trust?
Ordinary life insurance policies in trust do not qualify for BPR. However, there are specific 'relevant business property' life products marketed as qualifying for BPR. These typically invest in AIM or unlisted companies. They are higher risk and require careful assessment.
Can BPR be claimed on shares held through an ISA?
No. Shares held in ISAs do not qualify for BPR in the ISA wrapper — the ISA tax wrapper doesn't change the underlying IHT treatment. However, if the underlying shares would qualify for BPR (e.g., AIM shares), they can be held outside an ISA to claim BPR.
What is the clawback rule for BPR?
BPR is clawed back if the surviving spouse or beneficiary disposes of the qualifying business asset within 3 years of the transfer. Careful management is needed if business assets are sold shortly after a death.
Should I urgently review my BPR planning before April 2026?
Yes. For estates with significant business assets over £1M, the Budget 2024 changes fundamentally alter IHT exposure. Options include lifetime gifts, reorganisation, equalising business ownership between spouses, or accelerating succession planning. Seek urgent specialist advice if business assets exceed £1M.