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For years, the Alternative Investment Market (AIM) was the "go-to" for UK investors seeking fast-tracked inheritance tax (IHT) relief. However, the 2025 Budget and subsequent legislation have rewritten the rules. As we approach the April 2026 "cliff edge," a clear divide has emerged between AIM and the Enterprise Investment Scheme (EIS).
This article contains general information about tax relief regimes. For information specific to your personal circumstances do speak to a qualified financial adviser.
The era of unlimited 100% Business Relief (BR) is ending. From 6 April 2026, the government will introduce significant caps and rate reductions that fundamentally alter the math of estate planning:
The £2.5 million cap: For the first time, 100% Business Relief will be capped at a combined £2.5 million per individual for business and agricultural assets.
Transferability: This allowance is transferable between spouses, meaning a couple can protect up to £5 million in qualifying assets.
The effective rate: Any value exceeding these caps will only receive 50% relief, resulting in an effective IHT rate of 20%.
Perhaps the most significant change is the treatment of AIM-listed shares. The government has moved all AIM shares to a flat 50% relief status, removing the 100% exemption that previously made them a staple of estate planning.
"The downgrade of AIM is a seismic shift for IHT planning. An AIM portfolio worth £1 million, which would have passed tax-free under old rules, will automatically attract an IHT bill of £200,000 if held after April 2026. For many investors, the math simply no longer stacks up." — Graham Schwikkard, CEO
Summary of the change:
No 100% allowance: AIM shares will no longer qualify for 100% relief, even if they fall within your £2.5 million cap.
Automatic tax bill: This means an AIM portfolio worth £1 million, which would have passed tax-free under old rules, will automatically attract an IHT bill of £200,000 if the owner dies after April 2026.
Market risk: This reduction in tax incentives may dampen broader interest in the AIM market, potentially depressing valuations for existing holders.
In contrast to the AIM downgrade, EIS-qualifying shares remain one of the most effective tools for immediate IHT mitigation.
Retaining 100% relief: As unquoted shares in trading companies, EIS investments still qualify for the full 100% Business Relief on the first £2.5 million of assets.
The two-year rule: Like AIM, EIS shares only need to be held for two years to become exempt, compared to the seven-year requirement for traditional gifting.
Upfront benefits: EIS offers a 30% income tax reduction on the initial investment, which provides a significant buffer that AIM cannot match.
While EIS offers superior tax protection, the underlying risk of early-stage investing remains high. In our whitepaper, The Science of Startup Investing, we completed a fit analysis on UK startup data and found an alpha of 1.8, implying a strong power law distribution.
"In a power-law market, the opportunity cost of missing a winner is effectively infinite. We invest in 30+ companies because that is the threshold where you move from gambling on a handful of names to a data-led strategy designed to capture the winners that return the whole fund." — Tom Britton, Co-founder
For investors moving away from AIM, the Access EIS Fund offers a solution built on probability. By building a portfolio of 30+ startups alongside the UK’s most successful super-angels, we maximise your chances of capturing the fat tail while securing your 100% IHT exemption.
Audit your AIM holdings: If your IHT strategy relies on AIM, use our inheritance tax calculator to model your new 20% effective tax rate.
Calculate your IHT liability: Use our new and improved Inheritance Tax Calculator
Read the science behind the power law: Download The science of startup investing to see how our data model vets founders and manages risk.
Secure your allocation: High-net-worth investors are increasingly reallocating from AIM to EIS before the 2026 deadline. Learn more about the Access EIS Fund .
Please note: our office hours are weekdays, 9.30am - 5.30pm.
