Why Now Is the Time to Act on Inheritance Tax Planning

04 August 2025

Forthcoming Changes to Business and Agricultural Relief: Why Now Is the Time to Act on Inheritance Tax Planning

At Evans Entwistle, we make it our business to stay ahead of financial legislation changes that could significantly impact our clients. One area currently under the spotlight is Inheritance Tax (IHT) – specifically the forthcoming reform to Business Relief (BR) and Agricultural Relief (AR), which are expected to be capped at £1 million per estate.

What’s Changing?

Business Relief and Agricultural Relief have long provided families with effective ways to pass on trading businesses and agricultural property without incurring a large IHT liability. However, under new proposals, the amount of BR or AR that can be claimed may soon be capped at £1 million, dramatically reducing the IHT protection currently available for many family-run businesses and farms.

This proposed cap could take effect in the near future, although a formal implementation date is yet to be confirmed. For those with significant business or agricultural assets, this change could result in a much larger IHT bill on death – a scenario many families have so far been able to avoid.

What Does This Mean for You?

If you own a family business, agricultural property, or shares in a trading company, now is the time to review your estate planning strategy. The changes could:

• Reduce the relief available on your business assets
• Increase the taxable value of your estate
• Leave your beneficiaries facing unexpected tax liabilities

Planning Ahead: The Role of Trusts

One of the most effective ways to mitigate the impact of the proposed changes is to consider placing business assets into a trust. This can:

• Help preserve family wealth across generations
• Provide more control over how assets are distributed
• Potentially reduce your estate’s exposure to IHT

While trusts can be complex, with the right structure and guidance, they remain a highly flexible and powerful tool in estate and tax planning.

How Evans Entwistle Can Help

Our experienced tax planning team can work with you to:

• Assess your current exposure to IHT
• Model the impact of the proposed BR and AR changes
• Advise on the suitability of trust structures for your situation
• Ensure your business succession plans are tax-efficient and future-proof

Act Now, Before It’s Too Late

With change on the horizon, it’s essential to take proactive steps to protect your business and your family’s financial future. The earlier you begin planning, the more options are available to you.