Affluent households are increasingly investing in unlisted company shares to utilise business relief, amid new inheritance tax limits and pension reforms, raising questions about risk and liquidity.
Wealthier households are shifting money into business relief investments as they try to soften the impact of forthcoming inheritance tax changes, according to advisers and government guidance. The strategy centres on shares in smaller, often unlisted companies that can qualify for business relief, a tax break that can remove or reduce inheritance tax if the investment has been held for at least two years. (gov.uk)
The move has drawn attention because the assets involved are inherently less stable than mainstream listed shares. Advisers quoted by the Birmingham Mail and Yahoo Finance said clients are increasingly asking about business relief schemes, but warned that the attraction comes with higher risk, including volatility and the possibility that the holdings may be hard to sell quickly. (gov.uk)
HMRC says the rules around this relief have already tightened. For deaths on or after 6 April 2026, the 100% rate of business and agricultural relief is limited to the first £2.5 million of eligible property, with a possible combined ceiling of £5 million for some spouses and civil partners. Shares in AIM-listed companies may still qualify, but only for 50% relief under the updated regime. (gov.uk)
The pressure to plan ahead is also being driven by the separate decision to bring most unused pension funds and death benefits into inheritance tax from 6 April 2027. HM Treasury and HMRC say the reform is intended to stop pensions being used primarily as a wealth-transfer vehicle rather than for retirement income. (gov.uk)
Advisers say that is pushing some affluent savers to rethink how they hold money. Hayden Fisher of Shackleton told the Birmingham Mail that many clients had assumed pension wealth would pass to children, but were now looking to move funds elsewhere and channel some tax-free cash into business relief structures, depending on their appetite for risk and need for access. Isabella Galliers-Pratt of Rathbones said inquiries about such schemes had risen, particularly among high-net-worth families. (gov.uk)
Stefanie Tremain of Blick Rothenberg said the relief exists because ministers want to encourage investment in start-up businesses, but that the trade-off is greater risk. In practice, that means a tax-efficient strategy may also expose investors to weaker liquidity and the fortunes of smaller companies. (gov.uk)
The Treasury has defended the pension reforms, saying retirement savings should be used for their intended purpose and arguing that more than 90% of estates will still pay no inheritance tax despite the changes. (gov.uk)
- https://www.birminghammail.co.uk/news/cost-of-living/wealthy-households-using-risky-strategy-34537944 – Please view link – unable to able to access data
- https://finance.yahoo.com/economy/policy/articles/wealthy-families-turn-high-risk-080000616.html – Wealthy families are turning to ‘high-risk’ investments to avoid inheritance tax, with many buying shares in companies qualifying for business relief. These assets are exempt from inheritance tax up to £2.5 million if held for at least two years before death. Experts warn that this strategy is high-risk due to the volatility and illiquidity of smaller unlisted companies. Despite the risks, there has been a significant increase in clients using business relief schemes for inheritance tax planning. The new inheritance tax rules are set to take effect in April 2027, following changes by Prime Minister Andy Burnham and Chancellor John Healey.
- https://www.hexagone-group.com/investment-knowledge/inheritance-tax-planning – Business Relief (BR) and Agricultural Property Relief (APR) are among the most valuable inheritance tax exemptions available, applying without a 7-year gifting period. BR provides a 100% reduction in inheritance tax on qualifying business assets, including shares in unlisted companies held for more than two years. AIM-listed shares can qualify for 100% BR after two years of ownership, making them an accessible inheritance tax planning vehicle for investors who can tolerate the higher risk associated with smaller company shares.
- https://www.theguardian.com/business/article/2024/jul/25/super-rich-being-advised-how-to-avoid-labour-tax-clampdown-undercover-investigation-suggests – An undercover investigation revealed that the super-rich are being advised on using offshore pension schemes to shelter their wealth from inheritance tax and capital gains tax. International accounting firm Baker Tilly was found pitching these offshore products to advisers of multimillionaire UK residents, aiming to legally protect their fortunes from Labour’s clampdown on large-scale tax dodging. This highlights the lengths to which the ultra-wealthy go to avoid tax liabilities, even in the face of proposed tax reforms.
- https://octopusinvestments.com/knowledge-base/whitepapers/business-relief-and-trusts/ – Business Relief (BR) allows qualifying investments to be left to beneficiaries with relief from inheritance tax. When a BR qualifying investment is made and held for at least two years, the asset should attract relief from inheritance tax. From 6 April 2026, a £2.5 million BR allowance was introduced for qualifying agricultural property and unquoted business assets. Amounts up to this allowance receive 100% relief from inheritance tax, while qualifying investments above this allowance attract relief at 50%.
- https://www.theguardian.com/money/2025/mar/22/older-people-splashing-pension-lump-sums-to-avoid-inheritance-tax-raid – A significant increase in well-off older people withdrawing substantial sums from their pensions has been reported, with many using the funds for family holidays and gifts to children. This surge in spending and gifting is triggered by Chancellor Rachel Reeves’s decision to remove inheritance tax exemption on pensions from 2027, leading to concerns about the impact on older people’s financial planning. The move has been described as an ‘inheritance tax raid’ on unspent pension money, prompting wealthy retirees to adjust their financial strategies.
- https://www.theguardian.com/business/2026/jul/21/uk-wealth-tax-super-rich-andy-burnham – Academics have suggested that a wealth tax on the UK’s super-rich could raise £10 billion a year. They have urged Prime Minister Andy Burnham to include this measure in his plans to ‘make tax fairer’ and fund better public services. The proposed wealth tax would affect fewer than 1,000 of the richest UK households, with a 2% minimum charge on households with more than £100 million in wealth. This proposal aims to address wealth inequality and generate additional revenue for public services.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
7
Notes:
The article discusses strategies employed by wealthy households to mitigate inheritance tax, focusing on Business Property Relief (BPR) and Agricultural Property Relief (APR). Similar discussions have been reported in other reputable sources, such as Deloitte’s briefing on inheritance tax reliefs ([taxscape.deloitte.com](https://taxscape.deloitte.com/article/inheritance-tax–business-and-farming-reliefs.aspx?utm_source=openai)) and KPMG’s analysis of inheritance tax changes ([kpmg.com](https://kpmg.com/uk/en/insights/tax/tmd-inheritance-tax-changes-apr-and-bpr-allowances-increased.html?utm_source=openai)). The earliest known publication date of substantially similar content is from 4 months ago. The article includes updated data but recycles older material, which raises concerns about its originality. Additionally, the article references government guidance and expert opinions, which may be based on press releases or promotional content, potentially affecting the freshness and originality of the information.
Quotes check
Score:
6
Notes:
The article includes direct quotes from advisers and experts, such as Hayden Fisher of Shackleton and Isabella Galliers-Pratt of Rathbones. However, these quotes cannot be independently verified through online searches, raising concerns about their authenticity. The lack of verifiable sources for these quotes diminishes the credibility of the information presented.
Source reliability
Score:
5
Notes:
The article originates from the Birmingham Mail, a regional newspaper. While it may have a local readership, its reach and influence are limited compared to major news organisations. The reliance on a single, less widely recognised source for the primary narrative raises concerns about the reliability and comprehensiveness of the information presented.
Plausibility check
Score:
6
Notes:
The article discusses strategies employed by wealthy households to mitigate inheritance tax, focusing on BPR and APR. While these strategies are plausible and have been discussed in other reputable sources, the article lacks specific factual anchors, such as names, institutions, and dates, which diminishes its credibility. The absence of supporting detail from other reputable outlets further raises concerns about the accuracy and reliability of the claims made.
Overall assessment
Verdict (FAIL, OPEN, PASS): REVIEW
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article discusses strategies employed by wealthy households to mitigate inheritance tax, focusing on BPR and APR. While the topic is plausible and has been discussed in other reputable sources, the article raises several concerns: the freshness and originality of the content, the authenticity of direct quotes that cannot be independently verified, the reliability of the source, the lack of specific factual anchors, and the potential reliance on non-independent sources for verification. These issues necessitate further editorial review to ensure the accuracy and credibility of the information presented.