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From 6 April 2026, qualifying AIM shares drop from 100% BPR to 50% BPR. Combined with the new £2.5m cap, this fundamentally changes the economics of AIM IHT portfolios. A £1m AIM holding worth nothing in IHT terms before April 2026 will now generate up to £200,000 of IHT.
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This guide focuses on AIM shares specifically. For the wider BPR changes, see our guide to Business Property Relief changes from April 2026. For a broader overview of the Autumn 2024 Budget's IHT impact, see Autumn Budget 2025: Inheritance Tax Changes.
AIM (Alternative Investment Market) shares in qualifying companies have been eligible for Business Property Relief since 1996. Provided the shares were held for at least two years before death, and the company was a qualifying trading business (not mainly investing in land, securities, or similar), the entire value of the holding attracted 100% BPR — meaning zero IHT on those shares.
This created a thriving market in "AIM IHT portfolios" — investment managers built specialist portfolios of qualifying AIM shares marketed specifically as an IHT mitigation tool. Investors could hold a diverse portfolio of growth-oriented small company shares with the expectation that after two years, the holding would sit entirely outside their taxable estate.
The appeal was that unlike lifetime gifts — which trigger the 7-year rule — AIM shares remained in the investor's name, could be sold at any time, and generated no IHT as long as the two-year holding period was met. The investor retained control.
From 6 April 2026, AIM shares that previously attracted 100% BPR will only attract 50% BPR. This means:
Additionally, the £2.5m combined cap on BPR and APR means that AIM shares compete with other BPR and APR qualifying assets for the 100% band — though given AIM shares now only attract 50% even within the cap, this is less relevant for pure AIM portfolios.
Example: Investor with £800,000 AIM IHT portfolio
Under old rules:
AIM: 100% BPR = fully exempt. Taxable: £500k − £325k NRB = £175k at 40% = £70,000 IHT.
Under new rules from April 2026:
AIM: 50% BPR = £400,000 included. Taxable: £400k + £500k = £900k − £325k NRB = £575k at 40% = £230,000 IHT.
Additional IHT vs old rules: £160,000.
Not all AIM shares qualify for BPR — the company must be a trading business, not mainly an investment company. The qualifying conditions have not changed, only the rate of relief. Key conditions remain:
It is worth noting that HMRC's view of whether a particular company qualifies is not always predictable. Specialist AIM portfolio managers employ analysts to assess qualifying status, but HMRC can and does challenge individual holdings on the basis that the company's activity is mainly investment rather than trading.
The answer depends on your individual circumstances, but the key questions to ask are:
AIM shares are high-risk, small-company investments. Before April 2026, investors accepted lower expected returns (and higher volatility) partly because the IHT benefit offset the risk premium. With that benefit halved, the investment case needs to be reassessed on its own merits.
Other IHT mitigation strategies remain available:
If the rest of your estate is within the nil-rate band and RNRB, the 50% BPR on AIM shares may still reduce the overall IHT bill meaningfully. The arithmetic changes for each individual depending on the size and composition of the estate.
If you already hold AIM shares in an IHT portfolio, consider:
It is worth noting that the changes to AIM BPR come alongside the IHT thresholds being frozen until 2030. With house prices continuing to rise, more estates will be dragged into the IHT net even without considering AIM portfolios. The combined effect is a meaningful increase in the IHT burden for many families.
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