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From 6 April 2026, qualifying AIM shares drop from 100% BPR to 50% BPR. That changes the economics of AIM IHT portfolios: a £1m AIM holding worth nothing in IHT terms before April 2026 now sits in the estate at £500,000, which is up to £200,000 of IHT.
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 Budget 2025 IHT changes, 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.
The reduction was announced at the Autumn Budget on 26 November 2025. From 6 April 2026, AIM shares that previously attracted 100% BPR attract 50% BPR instead. GOV.UK puts it as a reduction "from 100% to 50% in all circumstances for shares admitted to trading on recognised stock exchanges designated as ‘not listed’". This means:
A second, separate change takes effect on the same date: a £2.5m allowance for the combined value of property qualifying for 100% APR or 100% BPR, with 50% relief on anything above it. That allowance was first announced at £1m and raised to £2.5m by the government on 23 December 2025, and any unused part of it can be transferred to a surviving spouse or civil partner. It does not change the AIM position either way: AIM shares are at 50% in all circumstances, so they neither draw on the allowance nor benefit from it.
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.
Nothing about the holding itself changes on 6 April 2026 — the shares, the two-year holding period and the qualifying conditions are the same. What changes is the relief rate, and with it three things people commonly weighed when the portfolio was built:
AIM shares are high-risk, small-company investments. Where the IHT relief was the reason for accepting that risk, half the relief is now available for the same risk. Whether that still balances is an investment question rather than a tax one, and a regulated financial adviser is the person who can answer it for a particular portfolio.
Other IHT reliefs and exemptions are unaffected by this change:
Where the rest of an estate is within the nil-rate band and RNRB, 50% BPR on AIM shares still removes half the holding from the taxable estate. The arithmetic differs with the size and composition of each estate.
The questions that come up most often about a portfolio already held:
It is worth noting that the changes to AIM BPR come alongside the how long the IHT thresholds are frozen. The two bands are frozen to different dates: the £325,000 nil-rate band to 5 April 2031, and the £175,000 residence nil-rate band and its £2m taper threshold to 5 April 2030. Because the bands are fixed while asset values are not, estates that were below the threshold when a portfolio was set up can be above it later, independently of anything that happens to AIM relief.
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