Business Relief (BR)—formerly Business Property Relief—is a cornerstone of UK estate planning, allowing qualifying assets to be passed on with up to 100% relief from Inheritance Tax (IHT). However, the landscape has fundamentally shifted. Since 6 April 2026, new caps have changed how sophisticated investors protect their legacy.
Business Relief is a government incentive designed to prevent the breakup of businesses to pay IHT bills. While the official HMRC Inheritance Tax thresholds usually apply a 40% tax to estates over £325,000, qualifying assets can receive either 50% or 100% relief (subject to individual circumstances and change).
Historically, BR provided unlimited 100% protection. Under the new regime, the level of relief depends on the asset type and its total value:
The £2.5 million 100% cap: Each individual now has a £2.5 million combined allowance for assets qualifying for 100% relief (e.g., unquoted trading shares, EIS, and SEIS).
The 50% “tail”: Any value exceeding this £2.5m threshold receives only 50% relief, resulting in an effective 20% IHT rate.
The AIM pivot: Since 6 April 2026, all qualifying AIM-listed shares have sat at a flat 50% relief rate, regardless of value. Notably, AIM shares do not use up your £2.5m allowance for 100% relief assets.
Transferable allowance: In a major win for couples, this £2.5m cap is transferable between spouses. A surviving spouse can combine allowances to protect up to £5 million at 100% relief (subject to qualification and change).
Important: Tax reliefs are subject to individual circumstances and may change. All capital invested in startup companies through EIS and SEIS schemes is at risk and may be lost entirely.
To secure relief, assets must be held for at least two years and the business must be “wholly or mainly” trading rather than investing, as outlined in HMRC’s technical guidance.
Unquoted trading companies: Shares in private limited companies, including family businesses.
EIS and SEIS funds: Most private, early-stage trading companies qualifying for Enterprise Investment Scheme and Seed Enterprise Investment Scheme tax reliefs.
Business interests: Sole trader or partner interests in a trading business.
AIM-listed shares: “Traded but not listed” shares are now permanently in the 50% bracket.
Controlling interests: Owning more than 50% of voting rights in a main-market listed company.
Personal business assets: Land, buildings, or machinery owned personally but used “wholly or mainly” by a business you control.
Risk reminder: While these assets may qualify for business relief, investments in early-stage and growth companies carry significant capital risk. You could lose all your money and capital is totally at risk. You should seek independent financial and tax advice before investing.
Graph showing IHT receipts from tax year 2001 to 2002 to tax year 2020 to 2021
With the move to a capped system, the “tax-efficiency stack” for private EIS investments has become the premier choice for investors under the £2.5m limit.
| Investment Type | IHT Relief (2026) | Income Tax Relief | Max Annual Investment |
|---|---|---|---|
| SEIS (Private) | 100% (up to cap) | 50% | £200,000 |
| EIS (Private) | 100% (up to cap) | 30% | £1m (£2m for KIC*) |
| AIM Shares | 50% Flat | 0% | Unlimited |
*Knowledge Intensive Companies
Our analysis of 5,000+ startups shows that 90% of un-diversified EIS portfolios fail. For a £10,000 investment by a 45% tax bracket investor, the total “efficiency stack” may include up to £2,760 in Income Tax relief and up to £3,680 in IHT savings (subject to individual circumstances). However, total capital at risk is £10,000, which may be lost entirely. By diversifying across 30 or more companies, we aim to spread risk across your capital and your relief, though losses are possible across the portfolio.
Use our tax relief calculator to see potential tax savings alongside total capital risk for your specific circumstances.
The capped relief system means timing is now a critical risk factor. Our Access EIS Fund is designed to provide high-growth exposure to private companies that remain eligible for up to 100% Business Relief within the £2.5m allowance, though all capital invested is at risk.
Ready to explore BR-qualifying investments?
The information on this page does not constitute financial advice and is provided on an information basis only. Tax reliefs are subject to individual circumstances and may change. All capital invested in startup companies through EIS and SEIS schemes is at risk and may be lost entirely. You should seek independent financial and tax advice before making any investment decisions.
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