IHT: more estates dragged into the net
The IHT nil-rate band and residence nil-rate band are frozen to April 2031. Meanwhile, asset values, especially property and business values, continue to rise.
For many small business owners, this means:
- Your estate may drift above the IHT threshold
- More of your business, property and investments could be taxed at 40% on death
Business and agricultural relief: still vital, but changing
Business and agricultural property relief (BPR/APR) remain key tools, but with a £1m combined allowance fixed until 2031 and new rules on transferring unused relief between spouses.
If your main wealth is in your trading company, BPR can reduce or remove IHT on shares, but only if you qualify and keep qualifying.
What this means for you
- You can’t rely on “IHT will change one day” as a strategy.
You do need a clear plan for passing on your business and assets tax-efficiently
Action steps
- Get a current estate snapshot
Add up your home, business, pensions, investments and life cover. See where you are against the IHT thresholds. - Check your business qualifies for BPR
If your company has lots of investment assets, or non-trading activity, this could restrict relief. - Revisit your will
Make sure it fits both your family wishes and the tax rules as they now stand. - Consider lifetime planning
- Gifts (potentially exempt transfers)
- Family investment companies
- Trusts where appropriate
- Review regularly
Values change. So do rules. Aim to review your IHT position every 2–3 years or when something major happens (sale, big property purchase, etc.).
How can we help at MDH
Book a quick tax chat with me, no strings attached. We’ll have a look at your situation and spot opportunities you might be missing. And as a thank-you, I’ll send you a free copy of our book 75 Ways to Pay Less Tax, packed with simple, practical tips you can put to work straight away. Let’s make sure your money’s working smarter, not harder.
