AIM Shares and Business Property Relief After the 2026 Changes

How has Business Property Relief for AIM shares changed from April 2026?

1From 6 April 2026, AIM shares qualifying for BPR are subject to a new 50% relief cap — previously they could qualify for 100% BPR.
2AIM shares still qualify for BPR if they are in a qualifying business and have been held for 2 years — but only 50% of their value is exempt from IHT.
3The change was announced in the Autumn Budget 2024 and applies to deaths on or after 6 April 2026.
4Executors dealing with estates containing AIM shares must value them carefully and apply the new 50% rate.
5Some AIM shares do not qualify for BPR at all — those in investment companies or property investment vehicles are excluded.

The 2024 Autumn Budget announced significant changes to Business Property Relief for shares traded on the Alternative Investment Market (AIM). From 6 April 2026, AIM shares that previously qualified for 100% BPR now only attract 50% relief — meaning executors and beneficiaries face an IHT charge on the remaining 50% of value.

What is Business Property Relief?

Business Property Relief (BPR) is an inheritance tax relief that reduces or eliminates the IHT charge on qualifying business assets. The main rates are:

100% relief on the value of a qualifying unquoted business or interest in one
100% relief on shares in an unquoted company
50% relief on quoted shares that gave control of a company
50% relief on land, buildings, and machinery used by the business

AIM-traded shares (shares on the London Stock Exchange's Alternative Investment Market) are treated as "unquoted" for BPR purposes because AIM is not a recognised stock exchange for tax purposes. This meant that qualifying AIM shares previously attracted 100% BPR.

The 2026 change: 50% cap on AIM BPR

From 6 April 2026, the government capped BPR on AIM shares at 50%. This means that AIM shares which qualify for BPR (in a trading business held for at least 2 years) are now subject to IHT on 50% of their value.

For example, if the deceased held £200,000 of qualifying AIM shares:

Pre-April 2026: 100% BPR — no IHT charge on the shares
From April 2026: 50% BPR — IHT charged on £100,000 at the applicable rate

At the 40% IHT rate, this would mean £40,000 of IHT on £200,000 of AIM shares that previously had no IHT liability.

Qualifying conditions for AIM BPR

Not all AIM shares qualify for BPR. To qualify, the shares must:

Be in a company that carries on a qualifying trading business (not wholly or mainly investment)
Have been held by the deceased for at least 2 years immediately before death
Not be in a company that is mainly investment, dealing in land, or holding investments

AIM property companies, investment funds, and cash-rich companies that are not genuinely trading do not qualify. HMRC can challenge BPR claims and will scrutinise large claims carefully.

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Executor obligations for AIM share estates

Executors dealing with estates containing AIM shares must:

Identify all AIM shareholdings — from stockbroker statements, investment platform accounts, and share certificates
Value the shares at the date of death— using the "quarter up" method (see below) from the Stock Exchange daily official list
Assess whether each holding qualifies for BPR — is the company a qualifying trading business? Has the 2-year holding period been met?
Apply the 50% relief (for deaths after 6 April 2026) to qualifying holdings
Report on the IHT400 return — Schedule IHT412 covers unquoted shares (including AIM)

Valuing AIM shares for IHT

AIM shares are valued using the "quarter up" rule:

Value = Lower price + one quarter of (higher price − lower price)

Using the Stock Exchange Daily Official List (SEDOL) prices for the date of death. If the date of death is a weekend or bank holiday, use the prices from the last working day before death.

A stockbroker or investment adviser can provide these valuations. The figures are reported on Schedule IHT412 (listed and unquoted shares).

IHT planning implications

The 2026 change significantly reduces the attractiveness of AIM shares as an IHT planning tool. Many investors have historically used AIM ISAs and direct AIM portfolios as a way of holding assets outside their taxable estate after 2 years. The 50% cap means this strategy now results in 50% of the AIM portfolio being subject to IHT.

This is a live area of estate planning. For the broader IHT position, see our inheritance tax UK 2026–27 guide.

For general estate administration guidance, see the estate administration checklist and complete UK probate guide 2026. Farra can help — get started here.

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