Big changes are coming in April 2026, but many family businesses are already feeling the effects.
The Government’s decision to reduce Business Property Relief (BPR) and Agricultural Property Relief (APR) by half might sound like a future problem, but it is already changing behaviour, and not in a good way.
Technically, these changes are part of the Inheritance Tax (IHT) regime.
Practically, they are creating immediate consequences for business owners trying to plan ahead.
The reforms are expected to raise £1.4 billion over the next few years, but that is not the only figure worth paying attention to.
Family Business UK estimates a potential £14.8 billion hit to the economy in lost value, with family firms taking nearly half that blow.
Job losses could exceed 200,000, not as a distant risk, but as a response to uncertainty businesses are already dealing with.
When business owners start pulling back by cutting jobs, holding off investment, or revising revenue forecasts, the business becomes a less stable proposition to buyers and investors.
Even if your core business remains strong, the perception of risk can alter how others see it.
That matters if you are planning a sale, seeking finance, or transitioning ownership. Your business might still function well day to day, but on paper, it could look less attractive.
In a recent FBUK survey, 39 per cent said they’re planning to pass on shares or assets before the April 2026 deadline.
16 per cent have already acted.
It’s a defensive move, a way of holding onto value before the reliefs are reduced. For those thinking about succession or restructuring, the window for strategic planning is closing quickly.
The same survey suggests that most businesses won’t be expanding after the changes.
More than eight in ten expect to reduce investment.
Only a tiny number expect growth. This matters because valuations are forward-looking. If your future profits look less certain, your current valuation will reflect that.
The agricultural sector mirrors these concerns almost exactly, which isn’t surprising given how heavily many farms rely on APR to stay within family lines.
This is not a call for panic, but it is a nudge to act. If you are hoping to raise money, pass on your business, or simply maintain its market value, don’t wait for 2026 to come around.
If you are not sure where to start, we are happy to talk you through your choices. Speak with our accountancy experts today.
