BHETA has been campaigning to protect family-owned businesses from changes to Business Property Relief (BPR) which could make it significantly more difficult to pass successful businesses from one generation to the next.
Working as an active supporter of the campaign led by Family Business UK (FBUK), BHETA has helped mobilise businesses, encouraged members to contact MPs, supported the provision of business case studies and added the voice of the housewares, DIY, garden and small electrical sectors to the wider national campaign.
That collective campaign has achieved important results.
Government's original proposal would have restricted 100% Business Property Relief to the first £1 million of qualifying business assets.
Following sustained pressure from FBUK, BHETA and the wider business and farming communities, Government first agreed to make the allowance transferable between spouses and civil partners and then, in December 2025, increased the individual allowance dramatically from £1 million to £2.5 million.
This means a married couple or civil partners can now potentially pass on up to £5 million of qualifying business assets with 100% Business Property Relief, before existing inheritance-tax allowances are taken into account.
This is a significant improvement on the Government's original proposal and protects many more smaller family businesses from the impact of the reforms.
Why Business Property Relief matters
Family businesses form an enormous part of the UK economy.
According to Family Business UK, there are around 5.1 million family businesses in Britain, representing approximately 93% of private-sector firms and employing around 15.8 million people.
Many BHETA members are themselves family-owned businesses, often built up over several generations.
Business Property Relief has historically played an important role in enabling the ownership of those businesses to pass from one generation to another without creating an inheritance-tax liability which could force the family to sell shares, property or other business assets simply to meet the tax bill.
For a family business, much of its value may be tied up in stock, factories, warehouses, intellectual property, premises and other assets rather than readily available cash.
BHETA believes tax policy should encourage long-term investment, entrepreneurship and continuity of ownership rather than create incentives for viable British businesses to be broken up or sold.
The original Government proposal
At the Autumn Budget in October 2024, Government announced fundamental changes to Business Property Relief.
Under the original proposal, from April 2026:
- Only the first £1 million of qualifying agricultural and business assets would receive 100% relief from inheritance tax;
- Qualifying assets above £1 million would receive only 50% relief;
- This would produce an effective inheritance-tax rate of up to 20% on qualifying business assets above the threshold; and
- The £1 million allowance was initially not transferable between spouses.
For businesses whose value was tied up in factories, property, equipment, stock and other operating assets, the potential consequences were significant.
BHETA was concerned that family businesses could be forced to divert investment into succession-tax planning or ultimately sell shares or business assets to fund inheritance-tax liabilities.
BHETA joins the national campaign
BHETA responded by supporting the national campaign led by Family Business UK.
We encouraged BHETA members to make their voices heard and produced template letters enabling both family-owned and non-family businesses to contact their MPs.
BHETA members were also encouraged to provide real-world case studies demonstrating how the reforms could affect investment, employment and succession planning.
The campaign rapidly developed into a major cross-industry effort.
FBUK's landmark Taxing Futures research was ultimately backed by 32 trade and industry organisations and provided detailed economic evidence about the potential consequences of the reforms.
The campaign included:
- Repeated engagement with No.10, HM Treasury and the Department for Business and Trade;
- Briefings for MPs and Peers from across the political spectrum;
- Constituency-level information supplied to MPs;
- Parliamentary events attended by MPs;
- Evidence to the House of Lords Finance Bill Sub-Committee;
- Open letters and national media campaigning; and
- The mobilisation of family businesses and trade associations throughout the UK.
BHETA's participation ensured that businesses from our sectors formed part of that much broader collective voice.
The economic case for change
FBUK commissioned independent research from CBI Economics to assess the potential effect of the reforms.
Its Taxing Futures report estimated that the original proposals could put more than 208,000 jobs at risk during the Parliament, reduce economic activity by almost £15 billion and ultimately result in a net loss to Government revenues.
The research also identified businesses delaying investment and reconsidering long-term ownership plans as a result of uncertainty surrounding BPR.
The findings became an important part of the parliamentary and political debate surrounding the reforms.
First campaign win: Government makes the allowance transferable
At the November 2025 Budget, Government announced an important concession.
Any unused portion of the Business Property Relief allowance would be allowed to transfer between spouses and civil partners.
This was one of the specific changes FBUK had asked Government to make.
Under the £1 million threshold then proposed, this potentially increased the combined allowance for a married couple or civil partners to £2 million.
It represented the first clear indication that Government was prepared to modify the policy in response to concerns raised by businesses.
Major campaign win: £1 million threshold increased to £2.5 million
The most significant breakthrough followed just a few weeks later.
On 23 December 2025, Government announced that the threshold receiving 100% Business Property Relief would increase from £1 million to £2.5 million per individual.
Because the allowance had also been made transferable, spouses and civil partners can potentially access £5 million of 100% BPR between them.
Government expressly acknowledged that it had listened to concerns raised by businesses and the farming community when announcing the change.
Family Business UK welcomed the decision as the result of more than a year of sustained campaigning by FBUK and other participating organisations.
For thousands of smaller family businesses, this represented a very substantial improvement on the position originally announced in October 2024.
What difference has the campaign made?
Government estimates that the increase in the threshold will reduce by approximately one third the number of estates claiming only Business Property Relief that are affected by the reforms, excluding estates holding only AIM shares.
The eventual system is therefore materially less damaging to smaller family businesses than the original proposal.
The campaign has achieved:
✓ An increase in the 100% BPR threshold from £1m to £2.5m
✓ Transferability of unused allowances between spouses and civil partners
✓ A potential combined £5m 100% BPR allowance for couples
✓ A significant reduction in the number of family-business estates affected
✓ 10-year interest-free instalments for inheritance tax due on qualifying BPR property
✓ Greater recognition within Government of the impact succession taxation can have on family businesses
These changes demonstrate the value of businesses speaking collectively through organisations such as BHETA and Family Business UK.
The new rules from April 2026
The revised Business Property Relief arrangements took effect on 6 April 2026.
Under the current rules:
- The first £2.5 million of qualifying agricultural and business property can receive 100% relief;
- Any unused allowance can transfer to a surviving spouse or civil partner, potentially creating an allowance of up to £5 million;
- Qualifying business property above the allowance receives 50% relief, producing an effective IHT rate of up to 20%;
- IHT on qualifying agricultural and business property can be paid over 10 annual interest-free instalments; and
- Separate rules apply to certain shares, trusts and lifetime transfers.
Businesses potentially affected should take appropriate professional tax and succession-planning advice.
An important victory – but the campaign is not over
BHETA welcomes the concessions secured through the FBUK-led campaign.
Moving from the Government's original £1 million non-transferable allowance to a £2.5 million transferable allowance represents a substantial improvement for family businesses.
However, it does not remove the issue completely.
Businesses worth more than the new threshold can still face significant inheritance-tax liabilities simply because ownership passes between generations.
Medium-sized family businesses can be particularly exposed because substantial company valuations do not necessarily mean that owners have the liquid cash required to meet the tax liability.
Family Business UK's latest research indicates that concerns remain.
In its 2026 Family Business Pulse research:
- 58% of family businesses said they still expected to be affected by the BPR/APR changes;
- The figure rose to 65% amongst businesses employing more than 50 people;
- 24% reported having deferred or reduced investment; and
- 23% reported cutting jobs or freezing recruitment.
FBUK therefore continues to call for the restoration of full Business Property Relief without an upper threshold and for meaningful dialogue with Government about the economic impact of the policy.
BHETA continues to support this campaign.
BHETA will continue to champion family businesses
This campaign demonstrates why collective representation matters.
An individual family business can explain how Government policy affects its own company.
Through BHETA, that evidence can be combined with businesses across our industries.
Through our partnership with organisations such as Family Business UK, those concerns can then become part of a national campaign encompassing thousands of companies and reaching Ministers, Treasury officials, MPs and Peers.
The Government did not reverse its BPR reforms completely.
But sustained campaigning helped turn an original £1 million non-transferable threshold into a £2.5 million transferable allowance, significantly reducing the number of family businesses affected.
That is meaningful progress.
BHETA will continue working with Family Business UK to ensure policymakers understand the contribution family-owned businesses make to employment, investment, communities and the UK economy – and the importance of creating a tax environment in which they can plan confidently for the next generation.
Is your business affected by the Business Property Relief changes?
BHETA wants to hear from members about the effect on succession planning, investment, employment or future ownership.
Member evidence strengthens our case and helps ensure the voice of our sectors continues to be heard in Government.
