In this episode of WealthTalk, Christian Rodwell is joined by Omar Aswat, Chartered Tax Adviser and founder of ASWATAX, to unpack the urgent changes coming to Business Property Relief (BPR) in April 2026 and what they mean for business owners and property investors. Omar explains how the new BPR limits could expose significant business value to inheritance tax, highlights the practical steps you should be taking now, and delves into strategies like family investment companies, trusts, and smart incorporation. The discussion also covers the impact of Section 24 on landlords, practical tax-saving tips for business owners, and succession planning tools for those looking to future-proof their wealth. Whether you’re scaling a business, building a property portfolio, or planning your exit, this episode is packed with actionable insights to help you stay ahead of the curve.

Key Takeaways

• Major Change to Business Property Relief (BPR) in 2026
  • From April 6, 2026, BPR will only exempt £1 million of value per trading company/group from inheritance tax (IHT); any value above will be taxed at 20%.
  • Urgent need for business owners to review structures and plan ahead.
• Who Is Affected?
  • Owners of trading companies/groups with assets above £1 million.
  • Property investment companies already subject to IHT—this rule change doesn’t benefit or worsen their position.
• Mitigation & Planning Strategies
  • Family investment companies (FICs)
  • Growth and freezer shares
  • Discretionary trusts
  • Gifting, sale acceleration, and succession planning
  • Case-by-case: bespoke advice is essential
• Section 24 & Incorporation for Property Investors
  • Section 24 restricts mortgage interest relief for personally held property; incorporation can offer tax savings but must be weighed against capital gains and stamp duty costs.
  • Comparative calculations are vital before transferring property into a company.
• Inheritance Tax Allowances Explained
  • £325,000 nil-rate band per person, plus £175,000 residence nil-rate band (if passing main home to direct descendants).
  • Married couples can combine for up to £1 million, but the rules are technical and not inflation-linked.
• Family Investment Companies (FICs)
  • FICs provide flexibility in dividend planning, control, and succession.
  • Can be set up new or by converting existing companies; often used in combination with trusts for asset protection.
• Smart Moves for Business Owners
  • Alphabet shares for flexible dividend planning.
  • Utilise directors’ loan accounts, charge rent for company premises owned personally, and salary sacrifice schemes.
  • SSAS pensions remain a powerful, underused tool.
• Planning for Exit or Sale
  • Early, proactive planning is essential—some reliefs require shares to be held for 24+ months.
  • Options: third-party sale, management buyout, employee ownership trust (EOT), company purchase of own shares, or new holding company.
  • EOTs: allow sale for 0% CGT if structured correctly, but success depends on a strong management team post-sale.
• Omar’s Experience & Podcast
  • Over a decade in finance, founder of ASWATAX (Leicester & London).
  • Hosts “Talking Tax Podcast,” covering EOTs, IHT, R&D, and more.
• Contact Details
  • Website: www.aswatax.co.uk
  • Email: [email protected] or [email protected]

Practical Tips

• Don’t delay—review your business and property structures now ahead of April 2026.
• Always seek bespoke, specialist advice before making structural tax decisions.
• Consider both current and future family/succession needs in your planning.
• Use comparative calculations to assess incorporation or restructuring benefits.
• Mention WealthBuilders if contacting Omar for tailored support.

Resources Mentioned

• Join the Inheritance Tax Guide Waitlist
• WT103 - Employee Ownership Trusts w/ Chris Budd
• WT295 - The Exit Roadmap: How to Sell Your Business for Maximum Value w/ Chris Spratling

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