A New Era of IHT: What the increased BR allowance means for advisers

The UK is entering a transformative phase for inheritance tax (IHT) planning. Rising IHT receipts, evolving client needs, and significant policy changes mean advisers must revisit long‑standing estate planning strategies. One of the most significant changes arrived in December, when the Government announced that the allowance for Business Relief (BR) and Agricultural Property Relief (APR) will rise from £1 million to £2.5 million per individual from 6 April 2026, enabling couples to pass on up to £5 million in qualifying business or agricultural assets before IHT applies¹.

This shift will fundamentally reshape the IHT landscape and brings new opportunities for advisers looking to protect client wealth whilst building long-term relationships across generations.

Why the higher BR and APR allowances matter

The uplift from £1 million to £2.5 million is substantial. It means far fewer business owners and farming families will face heightened IHT exposure under the new BR/APR regime. Government analysis suggests that the number of estates affected by the reforms will fall dramatically, with IHT bills reducing by hundreds of thousands of pounds for many families².

Key benefits include:

• More estates sheltered from IHT: The increase halves the number of APR-claiming estates expected to be impacted under the reforms¹
• Greater flexibility for couples: Spouses and civil partners can combine allowances to pass on up to £5 million, preserving more family wealth²
• Improved protection for family businesses: The uplift helps ensure ordinary farms and trading businesses aren’t disproportionately burdened as asset values rise³

For advisers, this creates a renewed requirement to revisit BR as a planning tool - not just for tax mitigation, but for achieving better long-term outcomes for families.

BR’s growing importance in IHT strategy

Even before the allowance increase, the IHT challenge was escalating. More estates are being caught by the frozen nil-rate band, and traditional planning routes - such as gifting or trusts - can be slow, inflexible, or impractical for clients who need access to capital.

BR has emerged as a central solution because it offers:

• IHT mitigation in just two years, under current rules
• Client control and access throughout the investment period
• Suitability for older clients who may not have the luxury of longer planning timelines

Foresight’s latest research reflects this shift: 63% of advisers used an unquoted BR‑qualifying investment in the past 12 months.

Beyond tax benefits, advisers increasingly value BR for its strategic advantages: improving client retention, enabling earlier engagement with beneficiaries, and strengthening intergenerational planning - areas where advisers can deliver real, measurable value.

How Foresight is shaping the future of BR planning

As BR has grown in prominence, so too has Foresight’s commitment to delivering high‑quality, unquoted BR‑qualifying investment options. We now offer three distinct BR solutions, each designed to meet specific client needs - ranging from higher return potential to immediate IHT protection via an insured option.

Our approach gives advisers the flexibility to tailor solutions for clients who prioritise:

• Speed of IHT effectiveness
• Risk‑adjusted returns
• Capital access
• Intergenerational planning goals

With the increased allowances coming into effect in 2026, advisers can now pair these BR solutions with significantly expanded tax advantages - helping clients retain more of the wealth they've built.

What does this mean for advisers?

The increase in BR and APR allowances is positive news for clients - but it also raises expectations of advisers. With more at stake, clients will look to their advisers for proactive, informed guidance on how best to structure their estates under the new rules.

The question is no longer whether BR should be part of an IHT strategy, but how effectively it is being used - and whether advisers are working with providers aligned to this new reality.

At Foresight, we’re committed to equipping advisers with the tools, solutions, and insight needed to navigate this evolving landscape. As the new allowances reshape the market, we see a clear opportunity for advisers to deepen relationships, protect family wealth and position themselves for long‑term growth.

For more support on how to prepare clients for the upcoming IHT changes, or to discuss how our BR solutions can support your planning approach, our team is ready to support you.

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¹ att.org.uk

² gov.uk

³ cla.org.uk