Here, Steven Appleton who leads the Business Owners and Entrepreneurs segment of Brabners Personal explores what’s changed and outlines how it could affect your Will in practice. 

During the halcyon days of unlimited qualification for Business Relief at 100%, it was commonly recognised that two things should happen:

To recognise that business interests can change over the years, many Wills were drafted to include a formula that would, in essence, pass the maximum number of shares in a business to the trust without IHT becoming payable — whatever that business might be. The remaining assets would then either pass outright to the surviving spouse or into a flexible life interest trust for their benefit.

The changes introduced from 6 April 2026 might undermine this planning and create unintended consequences. Whereas previously the formula would capture the whole value of the business in most cases, now it will capture only the first £2.5m of value. 

If you expected that the whole value of your business would pass into the trust and your interest is worth more than £2.5m, that will no longer happen. Any shares worth more than £2.5m will now pass under the residuary provisions of your Will. In some cases, this will be outright to a beneficiary such as a spouse (this never having been intended to happen). 

As an example, Michael has a trading business that meets the criteria for Business Relief. His shares are worth £10m. He’s married to Susan, although it’s a second marriage and each have children from their first marriages. The vast bulk of his assets are represented by the shares.

His Will says that he leaves all his shares that qualify for Business Relief (provided that no IHT becomes payable) into a trust. At the time of his death, he’s made lifetime gifts that have used up his IHT nil rate band of £325,000. He was content to leave his remaining assets outright to Susan as he knew that the bulk of his wealth (i.e. the business) would pass to his children via the trust.

If Michael now dies after 6 April 2026 without having changed his Will, the following would happen:

Susan would now control the business and it would also be open for her to give the shares away or change her Will and cut out Michael’s children. 

The impact of the legislation may be different depending on the individual drafting of the Will, so it’s important to review your Will and understand whether any changes should be made.

In particular, consider how any Business Relief-based provisions will now work in practice, who ends up owning shares in the business and whether that reflects your intentions for your family. 

Our award-winning private client team offers a fixed fee Will review service for business owners, helping to identify any risks arising from the changes to Business Relief and recommending updates where needed.