Over the coming months, UK business owners face a pivotal planning deadline. From April 2026, changes to Business Relief (BR) will significantly alter the inheritance tax landscape for trading businesses and their shareholders. While the technical detail matters, the implications are far broader touching ownership structures, succession planning, governance and long-term stewardship.
At Livingston James, our work with founders, CEOs and boards of family-owned, private equity-backed and founder-led businesses consistently shows that moments like this are not just tax events, they are leadership moments. In a recent article, Evelyn Partners considers a six-step sequence that owners could follow to prepare ahead of April 2026.
Step 1. Confirm BR qualification and identify which assets fall within scope
The starting point is understanding which parts of the business actually qualify for BR and which do not. Owners should work with advisers to review the company structure, activities and balance sheet. Traps often include large cash holdings, investment activities that creep into the company over time, or group structures with mixed trading and investment entities. Understanding these issues early helps avoid losing relief when planning steps begin.
A clear map of BR qualifying shares is essential for any trust strategy, share movement or pre-sale planning. Owners should also identify assets that are likely to lose BR during a future sale or restructuring so that contingency planning can begin now.
Step 2. Consider gifting strategy (including the potential use of trusts) before the April 2026 deadline
With the rules for BR changing, now is an important time to review gifting strategies, particularly where trusts are involved.
Before 6 April 2026, it is possible to transfer any value of BR-qualifying shares into a discretionary trust with no immediate inheritance tax charge, provided the shares qualify for relief.
From 6 April 2026 onwards, the amount of BR-qualifying assets that can be transferred into trust with 100% relief will be capped at £2.5 million per individual (higher than the initially announced £1 million). Any excess above this will attract only 50% relief, potentially giving rise to an immediate inheritance tax charge. This £2.5 million allowance is now transferable between spouses or civil partners, allowing a couple to pass up to £5 million of qualifying assets free of inheritance tax on the last spouse’s death.
Trusts can still play an important role in succession planning, family wealth preservation and long-term control, but they should be considered as part of a broader strategy. Gifting, whether directly or into trust, must be affordable and should not put your own financial security at risk.
Where trusts are being considered, decisions on structure and value should be made well in advance to allow time for legal drafting, valuations and any required shareholder approvals.
Step 3. Execute share reorganisations and ownership adjustments early
Many planning strategies require changes in the ownership structure before shares can be settled into trust or before a sale can proceed. Examples include spousal equalisation, creation of new share classes or preparing a holding company for a future transaction. These changes often take longer than expected due to legal processes, valuation work and the need for shareholder consent.
It is critical that reorganisations are completed before any trust transfers are attempted. Poor sequencing can inadvertently break BR conditions or create unexpected tax exposures. Owners who have not started the process should aim to complete structural changes as soon as possible to allow for any follow-up actions.
Step 4. Begin life insurance underwriting to cover BR loss on sale or restructuring
When a business is sold, BR qualifying shares convert into cash. The moment this happens, the potential inheritance tax protection they offered is lost. If the owner dies before the proceeds are reinvested or placed into an appropriate structure, their estate may face a large tax exposure.
Life insurance held in trust can provide a simple and effective bridge through this risk period, but underwriting can take weeks or months. Medical evidence, GP reports and financial information can create delays that may push completion too close to the deadline. Starting the underwriting process early can help to have cover in place when it is actually needed rather than after the event.
Step 5. Align corporate restructuring with personal estate planning
Corporate actions and personal planning must move together. Business owners often prepare for a sale or refinancing without considering how this interacts with their own wills, trusts and estate plans. For example, a new holding company may change BR status, or a change in voting rights may affect succession intentions. Wills may need to be updated to make best use of the BR allowance or to direct assets to trusts in a way that preserves and maximises potential relief.
Advisers should coordinate legal, tax and investment teams so that both the business and personal sides of the plan support each other. A short misalignment at the wrong moment can jeopardise years of planning.
Step 6. Prepare a post-sale liquidity strategy to maintain tax efficiency
Once a sale is complete, owners often hold large amounts of cash for a period while deciding how to reinvest. This creates an immediate inheritance tax exposure and can also lead to missed opportunities if reinvestment is slow or unstructured. A forward plan should outline where liquidity will be held, whether a family investment company (FIC) or personal investment company (PIC) is appropriate and how the proceeds will be managed until a long-term portfolio is established. Planning for this stage now reduces stress after completion and makes the overall transition more tax efficient.
Summary
While Evelyn’s article quite rightly focuses on the technical and legislative considerations, the subtext for business leaders is clear: these decisions shape who owns the business, who controls it, and how value is preserved across generations.
Trust planning, ownership restructuring and timing decisions should not sit in isolation from leadership and succession planning. In our experience, organisations that align these discussions involving advisers, boards and executive leadership early are better placed to navigate transition without destabilising the business.
As Evelyn Partners concluded in their article: “Business owners who are considering using trusts as part of their business relief planning should seek advice as soon as possible.”
We would echo that sentiment, with one addition: bring leadership, governance and succession into the conversation at the same time. Doing so ensures that technical planning supports – rather than constrains – the long-term health and legacy of the enterprise.
For executive search support or guidance around succession planning ahead of the upcoming Business Relief deadline, contact Ali Shaw for a confidential discussion: [email protected].
Sources
Evelyn Partners. “Business relief: the trust planning opportunity ending in April 2026.”, January 9, 2026, https://www.evelyn.com/insights-and-events/insights/business-relief-trust-planning-opportunity/
Business Relief Trust Deadlines Are Approaching: A Critical Time to Review Leadership and Succession Advice
Over the coming months, UK business owners face a pivotal planning deadline. From April 2026, changes to Business Relief (BR) will significantly alter the inheritance tax landscape for trading businesses and their shareholders. While the technical detail matters, the implications are far broader touching ownership structures, succession planning, governance and long-term stewardship.
At Livingston James, our work with founders, CEOs and boards of family-owned, private equity-backed and founder-led businesses consistently shows that moments like this are not just tax events, they are leadership moments. In a recent article, Evelyn Partners considers a six-step sequence that owners could follow to prepare ahead of April 2026.
Step 1. Confirm BR qualification and identify which assets fall within scope
The starting point is understanding which parts of the business actually qualify for BR and which do not. Owners should work with advisers to review the company structure, activities and balance sheet. Traps often include large cash holdings, investment activities that creep into the company over time, or group structures with mixed trading and investment entities. Understanding these issues early helps avoid losing relief when planning steps begin.
A clear map of BR qualifying shares is essential for any trust strategy, share movement or pre-sale planning. Owners should also identify assets that are likely to lose BR during a future sale or restructuring so that contingency planning can begin now.
Step 2. Consider gifting strategy (including the potential use of trusts) before the April 2026 deadline
With the rules for BR changing, now is an important time to review gifting strategies, particularly where trusts are involved.
Before 6 April 2026, it is possible to transfer any value of BR-qualifying shares into a discretionary trust with no immediate inheritance tax charge, provided the shares qualify for relief.
From 6 April 2026 onwards, the amount of BR-qualifying assets that can be transferred into trust with 100% relief will be capped at £2.5 million per individual (higher than the initially announced £1 million). Any excess above this will attract only 50% relief, potentially giving rise to an immediate inheritance tax charge. This £2.5 million allowance is now transferable between spouses or civil partners, allowing a couple to pass up to £5 million of qualifying assets free of inheritance tax on the last spouse’s death.
Trusts can still play an important role in succession planning, family wealth preservation and long-term control, but they should be considered as part of a broader strategy. Gifting, whether directly or into trust, must be affordable and should not put your own financial security at risk.
Where trusts are being considered, decisions on structure and value should be made well in advance to allow time for legal drafting, valuations and any required shareholder approvals.
Step 3. Execute share reorganisations and ownership adjustments early
Many planning strategies require changes in the ownership structure before shares can be settled into trust or before a sale can proceed. Examples include spousal equalisation, creation of new share classes or preparing a holding company for a future transaction. These changes often take longer than expected due to legal processes, valuation work and the need for shareholder consent.
It is critical that reorganisations are completed before any trust transfers are attempted. Poor sequencing can inadvertently break BR conditions or create unexpected tax exposures. Owners who have not started the process should aim to complete structural changes as soon as possible to allow for any follow-up actions.
Step 4. Begin life insurance underwriting to cover BR loss on sale or restructuring
When a business is sold, BR qualifying shares convert into cash. The moment this happens, the potential inheritance tax protection they offered is lost. If the owner dies before the proceeds are reinvested or placed into an appropriate structure, their estate may face a large tax exposure.
Life insurance held in trust can provide a simple and effective bridge through this risk period, but underwriting can take weeks or months. Medical evidence, GP reports and financial information can create delays that may push completion too close to the deadline. Starting the underwriting process early can help to have cover in place when it is actually needed rather than after the event.
Step 5. Align corporate restructuring with personal estate planning
Corporate actions and personal planning must move together. Business owners often prepare for a sale or refinancing without considering how this interacts with their own wills, trusts and estate plans. For example, a new holding company may change BR status, or a change in voting rights may affect succession intentions. Wills may need to be updated to make best use of the BR allowance or to direct assets to trusts in a way that preserves and maximises potential relief.
Advisers should coordinate legal, tax and investment teams so that both the business and personal sides of the plan support each other. A short misalignment at the wrong moment can jeopardise years of planning.
Step 6. Prepare a post-sale liquidity strategy to maintain tax efficiency
Once a sale is complete, owners often hold large amounts of cash for a period while deciding how to reinvest. This creates an immediate inheritance tax exposure and can also lead to missed opportunities if reinvestment is slow or unstructured. A forward plan should outline where liquidity will be held, whether a family investment company (FIC) or personal investment company (PIC) is appropriate and how the proceeds will be managed until a long-term portfolio is established. Planning for this stage now reduces stress after completion and makes the overall transition more tax efficient.
Summary
While Evelyn’s article quite rightly focuses on the technical and legislative considerations, the subtext for business leaders is clear: these decisions shape who owns the business, who controls it, and how value is preserved across generations.
Trust planning, ownership restructuring and timing decisions should not sit in isolation from leadership and succession planning. In our experience, organisations that align these discussions involving advisers, boards and executive leadership early are better placed to navigate transition without destabilising the business.
As Evelyn Partners concluded in their article: “Business owners who are considering using trusts as part of their business relief planning should seek advice as soon as possible.”
We would echo that sentiment, with one addition: bring leadership, governance and succession into the conversation at the same time. Doing so ensures that technical planning supports – rather than constrains – the long-term health and legacy of the enterprise.
For executive search support or guidance around succession planning ahead of the upcoming Business Relief deadline, contact Ali Shaw for a confidential discussion: [email protected].
Sources
Evelyn Partners. “Business relief: the trust planning opportunity ending in April 2026.”, January 9, 2026, https://www.evelyn.com/insights-and-events/insights/business-relief-trust-planning-opportunity/
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