BPR/APR reforms: Trustees guide

For many trustees who own APR and/or BPR qualifying assets, the changes to IHT relief will mean that IHT is now payable, or more IHT is payable than would have been the case under the old rules.

The first step should be to model what any IHT liability might be and then consider if that is affordable. Some trustees may be able to afford the charges out of the trust fund, and as part of the wider purpose of the trust, this liability might be an acceptable cost.

When the new rules will apply to a trust depends on the type of trust and when it began. Trustees should take advice now in advance of 6 April 2026 on when the rules will apply to them and what can be done in advance of that.

For many trustees, the potential IHT cost may not be affordable or acceptable, bearing in mind the assets held and the purpose of the trust. In this circumstance, it will be necessary to consider whether any steps can be taken to mitigate this. This might include bringing the trust to an end, selling assets, or transferring some assets out to beneficiaries. The timing of these steps will need to take into account the transitional rules for the IHT changes, the wider purpose of the trust and settlor’s wishes, and the longer-term aims and needs of the beneficiaries.

In all cases, whether changes are made or not, the IHT changes should be a catalyst for trustees to review their affairs and ensure their planning is up to date. Beneficiaries should also review their own planning, and that should include Wills, Lasting Powers of Attorney, and life insurance, which for many will become more important in providing the necessary liquidity for any IHT charges.