Family business owners in Dorset are being urged to ensure that they are aware of new inheritance tax rules which come into force in less than two months.
Dorchester Chamber for Business member, law firm Ellis Jones Solicitors, says that the threshold for 100% inheritance tax (IHT) relief on qualifying business assets owned by an individual will be raised to £2.5 million from 6 April 2026.
This Business Property Relief (BPR) – like Agricultural Property Relief (APR) – was due to be set at £1 million per person before the government watered down the measures in January.
It means that a married couple or civil partners can pass on up to £5 million of qualifying business assets before IHT applies. Above the threshold, a 50% relief will be applied to remaining assets.
Qualifying family-run businesses, private companies and individual business owners are among those who could qualify from 100% BPR up to the limit.
Ellis Jones Solicitors has offices in Somerleigh Road in Dorchester town centre.
Chris Pemberton, a partner in wills, trusts and probate who heads up Ellis Jones Solicitors’ Dorchester office, said: “The revision to BPR was somewhat overshadowed by the accompanying changes to the APR, or so-called farm tax.
“BPR offers valuable relief although, much like APR, there will be complex new rules to navigate and some estates will still exceed the new threshold.
“It is essential to be aware of the new regime and understand what the rules will mean in terms of inheritance tax liabilities as well as options for strategic business and estate succession planning.”
Under current legislation, qualifying business property assets of unlimited value attract 100% relief from IHT.
Chris added: “Some business owners may have already set the wheels in motion to take advantage of the current rules before April 6 but that is a rapidly closing window of opportunity.”
Ellis Jones Solicitors held an Agricultural Inheritance Tax and Succession Planning Seminar held at Coastland College’s Kingston Maurward in December.
The law firm joined forces with chartered accountants and tax advisors PKF Francis Clark, Coastland College and estate agents, auctioneers and surveyors Symonds & Sampson for the event.
Specialist solicitors in Ellis Jones’ Legal 500-rated business services and wills, trust and probate teams are able to provide advice for individuals and business owners.
Visit Ellis Jones’ Legal to find out more about some of the IHT complexities.
About Ellis Jones Solicitors:
Ellis Jones is a regional law firm with 187 staff including 23 Partners. It has eight offices across the south in Bournemouth, Canford Cliffs (Poole), Dorchester, Ringwood, Swanage, Broadstone and Wimborne – as well as London – and offers a wide range of services to individuals and businesses. For more information, visit www.ellisjones.co.uk.
With around 100 members any business in Dorset can join Dorchester Chamber from business for £60p/a (no VAT).
