The Budget headlines may feel like old news, but the real impact is only just beginning. From 6 April 2026, some of the most significant changes to inheritance tax, pensions and business planning in a generation come into force.
For business owners, farmers, landlords and SME directors, this is not a distant problem. It is an issue that needs attention and planning for now.
At Una Vita Financial Planning, we are already helping clients prepare for what we call the ‘April 2026 implementation milestone’, and the numbers can be sobering.
The £2.5 Million Inheritance Tax Milestone: Is Your Business Now a Liability?
From April 6, 2026, Agricultural Property Relief (APR) and Business Property Relief (BPR) will be capped for the first time.
What is changing?
- 100% APR and BPR will be limited to a combined £2.5 million
- This is an increase from the originally proposed £1 million cap
- Any unused allowance can be transferred to a surviving spouse or civil partner
- Assets above the £2.5 million threshold will face inheritance tax at an effective rate of 20 percent, rather than the standard 40 percent
This change brings many previously exempt family assets firmly into the inheritance tax net.
Why this matters for family businesses and farms
For decades, family-owned businesses, trading companies and farms structured correctly could pass largely tax free on death. From April 2026, that assumption no longer holds.
Once the £2.5 million allowance is used, the excess becomes taxable. For many owners, this turns a proud family legacy into a potential cash flow problem for the next generation.
Example: The Dairy Farmer Dilemma
Consider a mixed dairy farm valued at £4 to £5 million, including land, buildings and machinery.
Under the new rules:
- £2.5 million may still qualify for full relief
- The remaining £1.5 to £2.5 million could face a 20 percent inheritance tax charge
- This could create a bill of around £600,000
- Even if paid over 10 years at £60,000 per year, this level of liability can be unsustainable on low margins
The increase in the agricultural nil rate threshold to £2.5 million, transferable to a surviving spouse, helps. But without forward planning, many farming families will still face difficult decisions.
Succession planning is no longer optional. It is essential.
The Dyson Effect: Why Family Businesses Are Hit Harder Than PLCs
Large publicly listed companies are owned by thousands of shareholders. When a founder dies, there is no single inheritance tax event. Family owned manufacturers, engineering firms and service businesses on local industrial estates do not have that luxury.
This creates what we call the Dyson Effect. Large family businesses can face significant inheritance tax exposure, while equivalent sized PLCs do not. It raises questions of fairness, but more importantly, it demands proactive planning for owners.
Your Pension Is No Longer an Inheritance Tax Shield
Historically, advisers encouraged clients to spend non-pension assets first and preserve pensions for later life or inheritance. That advice is now outdated.
What is changing?
- Pensions will become effectively inheritance tax neutral
- Full inclusion does not begin until 2027, but 2026 is the year to restructure
- Leaving a pension untouched is no longer automatically the most tax efficient option
A new withdrawal strategy
If pensions will be taxed on death anyway, drawing income earlier and using it strategically can make sense.
One option is lifetime gifting. By taking pension income now and gifting it to children or grandchildren, you can start the seven year inheritance tax clock while you are still alive. This can reduce the eventual tax burden and help younger generations when they actually need the support.
Business Owners: Have You Costed Your Retirement Into Your Prices?
April 2026 also brings rising operational pressure for SMEs:
- Higher National Insurance costs
- New business rate valuations
- Increased digital tax compliance
- Tighter margins across many sectors
Against this backdrop, many business owners still treat retirement as an afterthought.
The Price List strategy
Every major PLC builds pension costs into its pricing model. Small business owners should do the same. Ask yourself one simple question: Have you costed your retirement into your prices?
Treating retirement funding as a legitimate business expense can transform long term outcomes. It also brings clarity to pricing decisions and profitability.
For many SMEs, asset finance can also play a role in 2026, allowing equipment upgrades while protecting working capital.
Salary Sacrifice: The Long Game Most People Are Missing
The rules around salary sacrifice remain generous, but not forever.
A National Insurance cap of £2,000 is planned for 2029. While that may feel distant, it creates a clear planning window.
In simple terms, this is a classic case of filling your boots while the rules are favourable. Using salary sacrifice effectively now can deliver meaningful tax savings before the landscape changes again.
Paying Your Future Self: A Better Way to Think About Saving
One of the biggest barriers to financial planning is psychology. Saving often feels like deprivation. In reality, it is simply delayed payment. We encourage clients to reframe this as paying your future self. You are not losing money today. You are paying a salary to the person you will become. Redirecting even modest amounts into pensions or investments can fund a meaningful future income over time.
The 2 Week Holiday Analogy: Why Someday Needs to Be Now
Life after 45 often feels like the second week of a two week holiday. Time moves faster than you expect. Waiting for the perfect moment to plan rarely works. The most effective financial strategies are started early and refined over time.
Which Financial Archetype Are You?
Most people fall into one of three categories:
- Not Enough: You need to grow wealth
- Just Right: You need to protect what you have built
- Too Much: The taxman is your biggest beneficiary
Knowing which category you are in shapes every planning decision that follows.
Planning for April 2026 Starts Now
The April 2026 changes are not a theoretical exercise. They affect real businesses, real farms and real families. Whether you are concerned about inheritance tax, pension strategy, business resilience or simply making better use of your income, early planning creates options.
At Una Vita Financial Planning, we specialise in helping business owners and families navigate complex change with clarity and confidence.
If you would like to understand how these reforms affect your situation, now is the time to act. Get in touch with Alasdair at Una Vita Financial Planning today to start your journey to financial freedom.
The information provided in this article is not intended to offer advice.
It is based on Una Vita Financial Planning Limited’s interpretation of the relevant law and is correct at the date shown. While we believe this interpretation to be correct, we cannot guarantee it. Una Vita Financial Planning Limited cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained in this article.