The Government’s decision to halve Business Property Relief (BPR) and Agricultural Property Relief (APR) from April 2026 is already changing how family businesses and farms operate.
While it falls under Inheritance Tax (IHT), the impact is reaching far beyond succession planning.
According to official estimates, the reform is expected to raise an additional £1.4 billion by the end of this Parliament.
However, early indicators suggest a sharp drop in business confidence, with companies already making tough decisions in response.
When confidence drops, valuations follow
Reduced confidence is having a visible effect on business performance.
Forecasts from Family Business UK (FBUK) suggest a loss in gross value added (GVA) of £14.8 billion over the next five years, with £6.5 billion of that linked to family-run businesses.
More than 200,000 jobs could be lost, with over half of those cuts likely to happen before the April 2026 deadline.
This is already feeding into how businesses are valued.
Firms are scaling back investment, trimming headcounts, and forecasting weaker turnover, all of which are warning signals for buyers, lenders and investors.
A business with falling investment or reduced profitability can quickly become a less attractive proposition, even if the fundamentals remain sound.
If you are thinking about succession or sale, pay close attention
If you are planning to sell your business, seek funding or hand it over to the next generation, these reforms may affect more than your future tax position.
They could change how your business is perceived on paper.
Valuations are sensitive to risk, and any uncertainty around future tax exposure, profit stability or leadership transition can weaken your position in negotiations.
Many business owners are already acting.
In a recent FBUK survey, 39 per cent said they were planning to gift shares or assets before April 2026.
Around 16 per cent have already done so. These moves are designed to preserve business value while the rules remain in their current form.
The numbers behind the noise
The FBUK survey provides a bleak outlook for investment.
84 per cent of businesses expect to cut investment after the rule changes take effect.
Only two per cent expect to invest more.
Turnover forecasts are similarly pessimistic, with just three per cent of businesses expecting growth.
In the agricultural sector, the figures are nearly identical.
These projected declines are likely to weigh heavily on business valuations, especially for those seeking funding or considering a sale in the next two to three years.
Reduced investment often leads to reduced output, and in small family-run firms or farms, even small cuts can have a disproportionate effect.
Every business will feel this differently, the key is not to wait
While the IHT changes have a fixed date, their influence on business value is already unfolding.
Decisions made now will shape how financially secure your business remains during this period of uncertainty.
If you are concerned about valuation, succession or your long-term position, speak to us today about a plan that protects your interests.
