Daniel Watson examines key changes to business property relief in Taxation
Daniel’s comments were published in Taxation, 31 March 2026, and can be seen here.
Daniel Watson, Senior Associate in our Private Client department, discusses he major forthcoming changes to Business Property Relief (BPR) taking effect on 6 April 2026.
These include the new combined £2.5 million APR/BPR allowance per individual and its transferability between spouses. He highlights that although BPR above this threshold will reduce from 100% to 50%, the relief remains valuable, particularly for family businesses preparing for future succession. Daniel explains the importance of ensuring that business interests continue to meet qualifying conditions such as being trading rather than investment‑focused and notes key considerations including ownership periods, excluded assets like surplus cash, and strategic use of the refreshed seven‑year gifting cycle.
Daniel goes on to examine the significant implications of the new rules for trusts, especially relevant property trusts and interest in possession structures. He outlines how pre‑30 October 2024 settlements may retain more favourable treatment until their first ten‑year anniversary after April 2026, creating potential planning opportunities for substantial BPR‑qualifying estates. He also emphasises the complexities surrounding lifetime transfers into and out of trusts, the risk of clawback on gifts made within seven years of death, and the need to balance tax efficiencies with practical considerations such as control, affordability, and asset protection for future generations.
Finally, Daniel turns to succession planning, stressing the ongoing value of discretionary will trusts in providing flexibility for passing family businesses to the most appropriate beneficiaries. He warns that existing will precedents may require review in light of the new £2.5 million limit and urges careful drafting to avoid unintended consequences. He also underscores the growing importance of obtaining accurate valuations, considering funding strategies for increased inheritance tax exposure, and reviewing CGT reliefs. With these changes approaching, Daniel encourages families and business owners to take proactive, comprehensive advice to ensure their succession and tax planning remains robust and future‑proof.
Read the full article on the Taxation website, [subscription required].