When it comes to inheritance tax (IHT), the standard advice often revolves around simple gifts and basic trusts. But for the super rich, that's just scratching the surface. They play a different game entirely, using a playbook of sophisticated, scalable strategies designed to preserve generational wealth while often maintaining control of their assets.
Inheritance tax receipts have been on an upward trend for many years now. More and more households are finding themselves liable, thanks to a combination of frozen tax thresholds, rising asset values, and planned government reforms. Now is the time to take a look at the strategies available to minimise the inheritance tax you pay.
Forget waiting seven years for a gift to become tax-free. The preferred methods are faster, more dynamic, and integrated into their investment portfolios. Here’s how they do it. (You can also read our detailed guide to tackling inheritance tax here),
The core strategy: business relief (BR)
This is the cornerstone of serious IHT planning. Business Relief (BR), formerly Business Property Relief, reduces the value of qualifying assets when inheritance tax is calculated. Since 6 April 2026 each person has a £2.5m allowance for assets qualifying at 100%, transferable between spouses and civil partners, so a couple can cover up to £5m. Qualifying value above the allowance receives 50% relief, an effective 20% inheritance tax charge. The holding period is two years, and relief depends on the company keeping its qualifying status. Tax treatment depends on individual circumstances and may change.
The wealthy don't just see this as a tax loophole; they see it as a government incentive to drive investment into UK businesses. Here are the two routes they use, which the April 2026 changes now treat very differently:
1. AIM-listed portfolios
The Alternative Investment Market (AIM) is packed with growing companies that qualify for BR, and wealth managers have long built dedicated AIM IHT portfolios from BR-qualifying stocks. What changed in April 2026: shares designated "not listed" on the markets of recognised stock exchanges, which covers AIM companies and EIS companies quoted on AIM, now receive 50% relief at any value. They no longer attract 100% relief, and they do not use up the £2.5m allowance.
How it now stacks up:
2. High-growth EIS and SEIS funds
For those with a higher risk appetite, the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are powerful tools. Most EIS and SEIS investments are in private, unquoted trading companies, and these remain eligible for up to 100% Business Relief within the £2.5m allowance after two years. Business Relief is assessed separately from EIS qualification: the company must be wholly or mainly trading, and it must keep its qualifying status.
The real appeal for wealthy investors is the stacked tax reliefs. They get upfront income tax relief (30% for EIS, 50% for SEIS, provided you claim it), tax-free growth, and loss relief if a company fails. These reliefs exist because the investments are high risk: EIS and SEIS companies are early-stage, illiquid, and a meaningful proportion fail outright. Capital is at risk and may be lost in full. They access these through specialised funds that build a portfolio of promising start-ups. Tax treatment depends on individual circumstances and may be subject to change.
The Angel Academe EIS Fund, for example, is popular because it targets high-growth, female-founded tech companies—a sector many savvy investors believe is undervalued.
Similarly, funds like the Carbon13 SEIS Fund attract capital from those wanting to invest in climate tech, combining huge tax breaks with an environmental impact focus.
This isn't just about avoiding tax; it's about getting into potentially explosive growth companies at ground level.
Foundational moves: strategic gifting and trusts
While BR is the power play, gifting and trusts are the foundational moves made early on. The super rich don't just use their £3,000 annual exemption.
They make substantial 'potentially exempt transfers', large cash gifts, often of hundreds of thousands or millions, to their children to start the seven-year clock as early as possible.
More importantly, they use trusts. A trust isn't just for avoiding tax. It’s a mechanism for control. By placing assets in a trust, they can dictate how and when their heirs receive the wealth, protecting it from divorce settlements, creditors, or irresponsible spending for generations to come. They use expert lawyers to create bespoke trust structures that lock in family wealth for decades.
In essence, the strategy is a two-pronged attack: move significant wealth out of the estate early using trusts and gifts, then shield the remaining liquid wealth with a fast-acting, investment-based BPR strategy that keeps the capital working for them.
Sources
GOV.UK. (2025). Business Relief for Inheritance Tax. Available at: https://www.gov.uk/business-relief-inheritance-tax
GOV.UK. (2025). Inheritance Tax. Available at: https://www.gov.uk/inheritance-tax
GOV.UK. (2025). Venture Capital Schemes: apply to use the Enterprise Investment Scheme. Available at: https://www.gov.uk/guidance/venture-capital-schemes-apply-for-the-enterprise-investment-scheme
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When it comes to inheritance tax (IHT), the standard advice often revolves around simple gifts and basic trusts. But for the super rich, that's just scratching the surface. They play a different game entirely, using a playbook of sophisticated, scalable strategies designed to preserve generational wealth while often maintaining control of their assets.
Inheritance tax receipts have been on an upward trend for many years now. More and more households are finding themselves liable, thanks to a combination of frozen tax thresholds, rising asset values, and planned government reforms. Now is the time to take a look at the strategies available to minimise the inheritance tax you pay.
Forget waiting seven years for a gift to become tax-free. The preferred methods are faster, more dynamic, and integrated into their investment portfolios. Here’s how they do it. (You can also read our detailed guide to tackling inheritance tax here),
The core strategy: business relief (BR)
This is the cornerstone of serious IHT planning. Business Relief (BR), formerly Business Property Relief, reduces the value of qualifying assets when inheritance tax is calculated. Since 6 April 2026 each person has a £2.5m allowance for assets qualifying at 100%, transferable between spouses and civil partners, so a couple can cover up to £5m. Qualifying value above the allowance receives 50% relief, an effective 20% inheritance tax charge. The holding period is two years, and relief depends on the company keeping its qualifying status. Tax treatment depends on individual circumstances and may change.
The wealthy don't just see this as a tax loophole; they see it as a government incentive to drive investment into UK businesses. Here are the two routes they use, which the April 2026 changes now treat very differently:
1. AIM-listed portfolios
The Alternative Investment Market (AIM) is packed with growing companies that qualify for BR, and wealth managers have long built dedicated AIM IHT portfolios from BR-qualifying stocks. What changed in April 2026: shares designated "not listed" on the markets of recognised stock exchanges, which covers AIM companies and EIS companies quoted on AIM, now receive 50% relief at any value. They no longer attract 100% relief, and they do not use up the £2.5m allowance.
How it now stacks up:
2. High-growth EIS and SEIS funds
For those with a higher risk appetite, the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are powerful tools. Most EIS and SEIS investments are in private, unquoted trading companies, and these remain eligible for up to 100% Business Relief within the £2.5m allowance after two years. Business Relief is assessed separately from EIS qualification: the company must be wholly or mainly trading, and it must keep its qualifying status.
The real appeal for wealthy investors is the stacked tax reliefs. They get upfront income tax relief (30% for EIS, 50% for SEIS, provided you claim it), tax-free growth, and loss relief if a company fails. These reliefs exist because the investments are high risk: EIS and SEIS companies are early-stage, illiquid, and a meaningful proportion fail outright. Capital is at risk and may be lost in full. They access these through specialised funds that build a portfolio of promising start-ups. Tax treatment depends on individual circumstances and may be subject to change.
The Angel Academe EIS Fund, for example, is popular because it targets high-growth, female-founded tech companies—a sector many savvy investors believe is undervalued.
Similarly, funds like the Carbon13 SEIS Fund attract capital from those wanting to invest in climate tech, combining huge tax breaks with an environmental impact focus.
This isn't just about avoiding tax; it's about getting into potentially explosive growth companies at ground level.
Foundational moves: strategic gifting and trusts
While BR is the power play, gifting and trusts are the foundational moves made early on. The super rich don't just use their £3,000 annual exemption.
They make substantial 'potentially exempt transfers', large cash gifts, often of hundreds of thousands or millions, to their children to start the seven-year clock as early as possible.
More importantly, they use trusts. A trust isn't just for avoiding tax. It’s a mechanism for control. By placing assets in a trust, they can dictate how and when their heirs receive the wealth, protecting it from divorce settlements, creditors, or irresponsible spending for generations to come. They use expert lawyers to create bespoke trust structures that lock in family wealth for decades.
In essence, the strategy is a two-pronged attack: move significant wealth out of the estate early using trusts and gifts, then shield the remaining liquid wealth with a fast-acting, investment-based BPR strategy that keeps the capital working for them.
Sources
GOV.UK. (2025). Business Relief for Inheritance Tax. Available at: https://www.gov.uk/business-relief-inheritance-tax
GOV.UK. (2025). Inheritance Tax. Available at: https://www.gov.uk/inheritance-tax
GOV.UK. (2025). Venture Capital Schemes: apply to use the Enterprise Investment Scheme. Available at: https://www.gov.uk/guidance/venture-capital-schemes-apply-for-the-enterprise-investment-scheme
