Many clients invested in investments that specifically qualified for BPR and may now be considering what to do next. There are options!
If the investments qualify for BPR, you could put these into trust now for the benefit of your family without being affected by the £1m restriction. If you survive seven years, these funds can fall outside of your estate for IHT purposes, having crystallised the BPR available under current rules.
As the £1m allowance is “revived” every 7 years, you may decide to invest into new qualifying assets should you wish to do so.
In addition, many clients previously invested in AIM (the Alternative Investment Market) holdings which also qualified for BPR. As of the 2024 Budget, these now only qualify for 50% relief and the £1m allowance cannot be set against the funds. However, a couple could make use of the available BPR allowance together with their IHT nil rate band allowance to place up to £1.3m into trust for their family and descendants.
However a trust is funded, once the assets are held by the trustees they can then decide whether to continue to hold the same assets or whether to change them, for example into a fully discretionary portfolio.
How can Ludlow help?
Establishing a BPR trust before 1 April 2026 is a strategic move for business owners looking to maximise tax relief and protect their assets. With significant changes to BPR regulations on the horizon, acting now ensures you benefit from the current rules and avoid future restrictions.
Contact us with any questions you have about the upcoming changes, to explore how a BPR trust can fit into your overall strategy or if you would like more detailed information on setting up a BPR trust.
Ludlow Trust is unable to provide investment advice and independent advice should be sought from your financial advisor before any investment decisions are made.
Thursday 31st July 2025