Big Changes Ahead for Inheritance Tax, Pensions and Reliefs

What business owners across Greater Manchester, Lancashire and Cheshire need to know before 2026.

The 2024 Autumn Statement was more than political noise. It set out the most significant shake-up of Inheritance Tax (IHT), pensions, and reliefs like Business Property Relief (BPR) and Agricultural Property Relief (APR) in over a decade.

If you’re a business owner or landowner in Greater Manchester, Lancashire or Cheshire, these reforms matter. They change how your estate will be valued, taxed, and passed on.

Here’s what’s coming, what it means, and why you need to prepare.

Business Property Relief (BPR) & Agricultural Property Relief (APR)

Current position

Right now, BPR and APR can wipe out up to 100% of the value of qualifying business or agricultural property for IHT purposes. There’s no cap on value. That’s why so many family firms, landowners and entrepreneurs rely on these reliefs for succession planning.

From 6 April 2026

That landscape shifts. Under the new rules:

• A £1 million allowance will apply to the combined value of assets qualifying for 100% BPR or APR.
• Value above £1 million only gets 50% relief. That means 20% IHT instead of 40%.
• Couples using Nil Rate Bands and Residential Nil Rate Bands could still pass on up to £3 million tax-free.
• Trusts holding agricultural or business property will also be capped at £1 million.
• Shares on the AIM market drop from 100% relief to 50%. The same applies to shares listed on foreign, non-recognised exchanges.
• On the upside, the ten-year interest-free instalment option for paying IHT will be extended to all property qualifying for BPR or APR.

What this means

If you’re holding significant business assets, farmland, or AIM-listed shares, the tax advantages reduce sharply from 2026. It’s not the end of reliefs — but it is the end of blanket 100% cover. Succession planning will need recalculating.

Pension Legislation Update

Current position

At present, pension death benefits usually sit outside of the estate for IHT purposes. Trustees hold discretion, meaning pensions have been one of the most tax-efficient ways to pass on wealth.

From 6 April 2027

The draft legislation changes this balance:

• Personal Representatives (PRs) will be responsible for valuing unused pensions and paying the IHT. This duty shifts liability away from pension companies and onto the estate.
• “Relevant death benefit” is now defined to include:
• Pension death benefits
• Lump sum death benefits
• Annuities (Dependants’ scheme pensions and death-in-service benefits remain excluded.)
• PRs must collect information across all the deceased’s pension schemes — not just one. They’ll need to include this in the IHT account and split the liability correctly.
• Scheme administrators must pay the tax to HMRC within three weeks — a deadline many will question as realistic.

What this means

Executors and families will have more work and more responsibility. Instead of pension firms handling valuation and tax, the estate will carry the risk. For business owners with multiple pensions, this means tighter record-keeping and professional support will be essential.

The Bigger Picture for Business Owners

For entrepreneurs and landowners, these reforms narrow the traditional tax advantages of holding business and agricultural assets. They also add complexity to pension-based succession planning.

The days of assuming “my business passes tax-free” or “my pension sits outside IHT” are over. By 2026/27, that thinking could cost families significant tax.

Final Thoughts

The reforms to BPR, APR, and pensions are not small tweaks. They are structural changes that affect how estates are valued and taxed across the UK. For business owners in Greater Manchester, Lancashire, and Cheshire, the impact will be felt in family firms, landholdings, and personal wealth.

From April 2026 and April 2027:

• Your estate could carry IHT on assets that would have been fully relieved before.
• Executors will face new responsibilities around pensions.
• Planning ahead isn’t optional — it’s essential.

At Carter Collins & Myer, we help business owners navigate these changes, protect family wealth, and prepare for the next generation.

If your estate plan hasn’t been reviewed since these reforms were announced, now is the time. April 2026 will arrive faster than you think.