For private client solicitors, these changes have practical implications for estate planning, wills, trusts, business succession and estate administration. They also increase the importance of specialist tax knowledge within private client teams.

This guide explains what has changed, what happens next and what private client solicitors should be considering when advising clients.

What changed to Inheritance Tax in April 2026?

The most significant IHT changes taking effect on 6 April 2026 concern Agricultural Property Relief (APR) and Business Property Relief (BPR).

Under the new rules, the amount of qualifying agricultural and business property that can receive 100% relief is limited to a combined £2.5 million allowance per individual.

Qualifying agricultural or business property above the available £2.5 million allowance generally receives relief at 50%.

This means qualifying assets above the allowance may effectively be subject to IHT at up to 20%, rather than the standard 40% inheritance tax rate.

The £2.5 million allowance applies across qualifying agricultural and business property rather than providing a separate £2.5 million allowance for each relief.

Can the £2.5 million APR and BPR allowance be transferred between spouses?

Yes.

From 6 April 2026, any unused part of an individual's £2.5 million allowance can be transferred to their surviving spouse or civil partner.

A surviving spouse or civil partner could therefore potentially have access to an allowance of up to £5 million for qualifying agricultural and business property, depending on how much of the allowance was used on the first death.

Transitional provisions are also important. Where the first spouse or civil partner died before 6 April 2026, the rules can allow a full £2.5 million allowance to be available for transfer.

For private client practitioners advising families with farms or trading businesses, reviewing both current ownership arrangements and the estate of a previously deceased spouse or civil partner may therefore become an important part of succession planning.

What happens to qualifying assets above £2.5 million?

Qualifying agricultural and business property above the available 100% relief allowance can generally receive 50% relief.

At the standard 40% inheritance tax rate, this can result in an effective IHT rate of up to 20% on the qualifying value above the allowance.

The government has also extended the ability to pay IHT attributable to qualifying agricultural and business property in 10 equal annual interest-free instalments.

This is particularly relevant to estates containing valuable but relatively illiquid farms and family businesses, where beneficiaries or personal representatives may otherwise face significant liquidity issues.

What changed for AIM and other 'not listed' shares?

Another significant change concerns shares admitted to trading on recognised stock exchanges that are designated as "not listed", which can include qualifying shares traded on markets such as AIM.

From 6 April 2026, the rate of Business Property Relief available for these shares is reduced from 100% to 50%.

Private client solicitors dealing with estates or investment portfolios containing these assets should therefore consider whether existing estate-planning assumptions remain appropriate.

Have the main Inheritance Tax thresholds changed?

The main IHT nil-rate bands have not increased.

The standard nil-rate band remains £325,000, while the maximum residence nil-rate band remains £175,000 where the relevant conditions are satisfied.

The residence nil-rate band continues to taper for estates worth more than £2 million.

The government has extended the freeze on these thresholds through the 2030/31 tax year.

For private client practitioners, frozen thresholds can be significant because increases in property, investment and other asset values can bring more estates into potential IHT exposure even without a change to the headline 40% inheritance tax rate.

Are pensions affected by the 2026 Inheritance Tax changes?

Not immediately, but a major related change takes effect from 6 April 2027.

From that date, most unused pension funds and pension death benefits will be included within an individual's estate for inheritance tax purposes.

The legislation was enacted through Finance Act 2026.

Personal representatives will be responsible for reporting and paying any IHT due in relation to pension assets within scope. The legislation also introduces mechanisms allowing personal representatives, in certain circumstances, to instruct pension scheme administrators to withhold part of taxable pension benefits while the IHT position is resolved.

There are exclusions. For example, death-in-service benefits payable from registered pension schemes are excluded from the new IHT treatment.

For private client solicitors, the change means pension wealth will increasingly need to be considered alongside property, investments, trusts and business assets when assessing a client's overall estate-planning position.

What do the IHT changes mean for private client solicitors?

The reforms make inheritance tax planning increasingly interconnected with business succession, pensions, trusts and estate administration.

Private client solicitors may need to consider:

• whether existing wills still reflect a client's intended succession strategy;

• ownership and succession arrangements for family businesses and agricultural property;

• how the transferable APR/BPR allowance affects married couples and civil partners;

• lifetime gifts and the interaction with the seven-year rules;

• existing and new trust arrangements;

• liquidity within estates that may face an IHT liability;

• pension assets ahead of the April 2027 changes; and

• when specialist tax, pensions, agricultural or financial advice should be brought into the matter.

The Law Society's guidance on tax advice also emphasises the importance of solicitors defining the scope of their tax advice and ensuring clients can make informed decisions where specialist tax issues arise.

Do private client law firms need to register with HMRC as tax advisers?

There is another 2026 development that private client teams should not overlook.

HMRC introduced new mandatory tax adviser registration requirements from May 2026.

Broadly, businesses paid to interact with HMRC about another person's tax affairs are required to register unless an exemption applies. The registration system is being introduced in phases.

That can be relevant to law firms whose private client and probate teams submit inheritance tax information or otherwise deal with HMRC on behalf of clients.

Firms should therefore establish whether their work falls within the registration requirements and which transitional timetable applies to them.

Why are the IHT changes important for private client legal careers?

The reforms increase the technical complexity surrounding estates containing businesses, agricultural property, trusts and, from April 2027, pension assets.

For solicitors developing a career in private client law, knowledge of IHT increasingly sits alongside expertise in wills, probate, trusts, estate administration and succession planning.

Experience involving high-value or complex estates, business succession, agricultural estates and cross-disciplinary work with tax and financial advisers can therefore be particularly relevant to developing specialist private client expertise.

The changes also illustrate why private client law is broader than will drafting and probate administration. Advisers can find themselves working across tax, property, pensions, trusts, family wealth and business succession.

What should private client solicitors be doing now?

Private client practitioners should ensure that advice and internal precedents reflect the rules applying from 6 April 2026 and prepare clients for the pension changes arriving on 6 April 2027.

Particular attention may be appropriate for clients with:

• family businesses;

• farms or agricultural property;

• substantial pension assets;

• AIM or other qualifying "not listed" shares;

• existing trust structures;

• estates approaching or exceeding IHT thresholds; or

• succession arrangements prepared before the APR and BPR reforms were finalised.

Existing estate plans should not automatically be assumed to produce the same tax or succession outcome under the new regime.

Frequently Asked Questions

What changed to Inheritance Tax on 6 April 2026?

The principal changes concern Agricultural Property Relief and Business Property Relief. The combined value of qualifying agricultural and business property eligible for 100% relief is now generally capped at £2.5 million per individual, with 50% relief generally applying above the available allowance.

What is the Business Property Relief allowance in 2026?

From 6 April 2026, the 100% relief allowance is £2.5 million. It is a combined allowance covering qualifying property eligible for Agricultural Property Relief and Business Property Relief rather than a separate £2.5 million allowance for each.

Can married couples receive £5 million of 100% APR or BPR?

Potentially. Unused £2.5 million allowances can transfer between spouses and civil partners. Depending on the circumstances, the surviving spouse or civil partner may therefore have an allowance of up to £5 million for qualifying agricultural and business property.

What is the Inheritance Tax nil-rate band in 2026/27?

The standard nil-rate band is £325,000. The residence nil-rate band is up to £175,000 where the qualifying conditions are met. These thresholds are currently due to remain frozen through the 2030/31 tax year.

Are pensions subject to Inheritance Tax in 2026?

The major new pension rules do not take effect until 6 April 2027. From that date, most unused pension funds and pension death benefits will be brought within the value of the deceased's estate for IHT purposes, subject to specified exclusions.

How will the IHT changes affect private client solicitors?

The reforms increase the importance of reviewing estate plans involving farms, family businesses, pensions, trusts and high-value estates. Private client practitioners will need to understand how the new relief limits interact with wills, lifetime planning, succession arrangements and estate administration.

Private Client Solicitor Jobs

Changes to inheritance tax, estate planning and intergenerational wealth are increasing the technical demands placed on private client lawyers.

For solicitors considering their next move, Austen Lloyd works with law firms recruiting across private client, wills and probate, trusts, tax and estate planning throughout England and Wales.

Explore our latest private client solicitor jobs or speak to Austen Lloyd about opportunities that match your experience and career ambitions.

Last reviewed: September 2026

Sources: HM Revenue & Customs and GOV.UK guidance on Agricultural Property Relief, Business Property Relief, inheritance tax thresholds and the treatment of unused pension funds and death benefits; Finance Act 2026; and Law Society guidance for private client practitioners.

This article is intended as general career and legal-sector information and does not constitute legal, tax or financial advice.