Owning a business adds extra moving parts to your estate planning. The good news: there are generous reliefs. The bad news: they’re changing, and the legal paperwork inside your company often beats whatever your Will says.
1. BPR & APR: what’s changing (and what to watch)
- New allowances from April 2026 (draft law): a £1m “100% relief allowance” per individual for assets qualifying for 100% Business Property Relief (BPR) or Agricultural Property Relief (APR). Above that, relief drops to 50%.
- Shares on certain exchanges: BPR on some traded shares will reduce to 50%.
- Environmental land management: from April 2025, APR will extend to land in approved environmental schemes (conditions apply).
- IHT by instalments: the 10-year interest-free instalment option will extend to all BPR/APR-qualifying property, which helps with cashflow.
Takeaway: Relief isn’t “gone”, but the first £1m per person gets the full 100% — and value above that may only get 50% relief. Plan ownership and who inherits with that cap in mind.
2. Company documents vs your Will (the Will doesn’t always win)
- Pre-emption rights in the Articles or a shareholders’ agreement can force a deceased shareholder’s shares to be offered to the other owners first, before any transfer to a beneficiary is recognised.
- Other provisions include permitted transfers, compulsory transfers, or company buy-backs.
Practical tip: Your Will can say “leave my shares to X”, but if the company rules say otherwise, the company rules win. Always review Articles and shareholder agreements alongside your Will.
3. “Only director” risk: who can run the business tomorrow?
If you’re the sole director and you die, the company may grind to a halt. No one can operate bank accounts or sign contracts until probate — bad for staff, customers, and value.
What to do now:
- Appoint at least one additional director, or
- Update Articles so your personal representatives can appoint a director quickly.
- Review bank mandates and access to systems like payroll and accounting.
4. Cross-option & shareholder protection (funding the handover)
A cross-option agreement (often paired with life insurance) lets surviving owners buy the deceased’s shares at an agreed basis. The family gets cash, the business keeps control.
We can advise on the tax and legal consequences — your financial adviser handles the policies themselves.
5. Partnerships & LLPs: is the land actually a partnership asset (and will it stay protected)?
This is a frequent “gotcha”, especially in farming and professional practices.
- Land might be legally in one partner’s name but treated as a partnership asset under the deed.
- The partnership agreement, accounts treatment, minutes and any declarations of trust should all say the same thing. This affects reliefs and who inherits what.
The protection point: Without a properly written partnership agreement, assets you thought were ring-fenced for the trade may fall into your estate and be divided by your Will. If your Will leaves “everything equally to the four children” but only one farms, the others may demand their share of the land — forcing a sale and potentially ending the trade.
A clear partnership (or LLP) agreement keeps core assets inside the business, so active partners can carry on trading, while non-farming heirs can be provided for in other ways.
Why it matters even more now: Historically, assets owned personally but used by the business often only got 50% BPR. With the new £1m 100% allowance then 50% above coming in, aligning ownership could mean the difference between full and partial relief on substantial land and property values.
6. APR specifics for landowners
- From April 2025, land in environmental schemes may qualify for APR (subject to conditions).
- From April 2026, the £1m/50% split also bites here — so land values above the allowance may not get full relief.
7. Directors’ loans, property & group structures
- Directors’ loan accounts owed to you increase your estate’s value. Consider repayment strategies.
- Personally-owned property used by the company isn’t the same as property owned inside the company — different relief outcomes apply.
- Group structures: check which entity actually owns value (holdco vs opco) and ensure your Will lines up with your intentions.
8. Governance housekeeping that saves grief
- Keep the PSC register, share certificates, and cap table up to date.
- Store key contracts (leases, supplier agreements, customer SLAs) where a successor can find them.
- Leave a short “if I’m not here” guide — who to call (accountant, payroll, bank manager), where backups are, and how to access systems.
9. Reliefs recap (plain English)
- Today: many trading businesses and farming assets can achieve 100% relief.
- From April 2026: your first £1m of qualifying assets per person is at 100%; anything above may only get 50%. Certain listed shares will be capped at 50%. Instalment options will extend across the board.
Practical tip: Review three things together — your Will, your company/partnership paperwork, and your asset register. If they don’t line up, the legal documents usually win over your Will.
Call to action: Let us review your tax position under the new BPR/APR allowances, and check your business paperwork won’t undermine your Will. That way, you can keep the business (and its reliefs) in the right hands.
Back to You are not Immortal – a practical guide to a delicate topic – IHT
