Business owners should plan now to reduce inheritance tax exposure

Many business owners are acutely aware of the changes to inheritance tax (IHT) which will come into effect from 6 April 2026.

For those who don’t know, from this date onwards, the 100% relief on qualifying business assets will be capped at £1m per individual.

Any value above that will only receive 50% relief, which means an effective 20% tax charge to IHT on the excess above £1m.

This may have very dramatic and expensive consequences for business owners who don’t take action during their lifetime in order to minimise how much IHT will become payable on their deaths.

So, what steps can you take to reduce your exposure to this tax?

The most straightforward way to go about this is to gift some or all of the business assets outright to the next generation; if you survive seven years after