BPR + APR £2.5m Cap Calculator (April 2026 Reform): IHT Impact

Calculate the Inheritance Tax impact of the 6 April 2026 BPR + APR reform - 100% relief on the first £2.5m of qualifying business or agricultural property (raised from £1m in December 2025), 50% above. Unused allowance transfers to a spouse, giving £5m.

2026/27 tax year

Inheritance & Estate
UK-wide

Estate inputs

Qualifying BPR / APR property value

Unquoted trading-company shares, farmland in own occupation, sole-trader business assets.

AIM and other shares designated "not listed" on a recognised exchange (50% only)

Not the same as unquoted private-company shares, which go in the field above and do get the 100% allowance.

Other estate value

Main residence (for RNRB)

Marital / aggregation status

BPR + APR April 2026 rules

Pre-April-2026 (current): 100% BPR + APR on unlimited qualifying value (trading-company shares + farmland in own occupation + sole-trader business assets). AIM and unquoted shares alike: 100% BPR.
From 6 April 2026: 100% relief on the first £2.5m of qualifying BPR + APR property; 50% relief above (effective 20% IHT rate on the excess). The allowance is per individual, and trusts get a separate allowance of the same size.
Spousal transfer: any unused allowance transfers to a surviving spouse or civil partner, so a couple has £5m of qualifying property at the 100% rate across both deaths. This is enacted, not proposed: Finance Act 2026 section 65 and Schedule 12 insert a new Chapter 2A into IHTA 1984 providing for the transfer. Where the first death was before 6 April 2026, a full £2.5m allowance is assumed available to transfer.
Shares designated "not listed": 50% relief in all circumstances, outside the £2.5m allowance entirely. This is the category AIM shares fall into, along with qualifying shares on foreign exchanges that are not recognised stock exchanges. It does not include unquoted private trading-company shares, which keep the 100% rate within the allowance.
The £2.5m level was announced on 23 December 2025 - up from the £1m originally announced at Autumn Budget 2024.
HMRC forecasts up to 1,100 estates paying more Inheritance Tax in 2026 to 2027: up to 185 claiming agricultural property relief, and up to 915 claiming only business property relief, of which around 700 are expected to hold only shares designated as "not listed". Around 85% of estates claiming APR are forecast to pay no more than before. HMRC calls these static estimates that assume no behavioural change, so a maximum.

Planning implications

Family business succession. Estates with qualifying business value between £2.5m-£5m benefit most from spousal aggregation - leaving the business to surviving spouse uses both caps over two deaths.
Lifetime gifts (PETs). Gifting business interests during life triggers the 7-year clock - if the donor survives 7 years the gift falls out of the estate entirely. Worth considering for value above the £2.5m cap.
AIM portfolio repositioning. The loss of 100% BPR on "not listed" shares from April 2026 fundamentally changes the AIM-for-IHT-planning case. Many wealth managers have advised reduced AIM allocation.
Restructuring trading status. BPR requires the underlying business to be trading (not investment). Mixed-purpose companies risk losing relief altogether - review investment-side activity.