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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.
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Business Property Relief (BPR) is an inheritance tax relief that reduces or eliminates the IHT charge on qualifying business assets. The main rates are:
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.
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:
At the 40% IHT rate, this would mean £40,000 of IHT on £200,000 of AIM shares that previously had no IHT liability.
Not all AIM shares qualify for BPR. To qualify, the shares must:
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.
Executors dealing with estates containing AIM shares must:
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).
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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