How clients can retain 100% Business Relief when moving from AIM to unquoted shares

Many of your clients likely use Business Relief (BR) as part of their estate planning strategy, and at the start of this tax year, several significant reforms came into effect.

The key changes include:

• A new combined £2.5 million limit on assets qualifying for 100% BR and Agricultural Relief (AR), with any qualifying assets above this threshold receiving 50% relief instead
• The ability to transfer BR and AR allowances between spouses and civil partners
• AIM shares moving from 100% to 50% relief.

In light of these changes, many clients have questioned whether they can retain 100% BR by moving AIM investments into unquoted shares, which are still eligible for full relief.

HMRC has confirmed the answer is yes, but only if certain conditions are met. So, it’s important that clients receive the right advice to ensure they remain compliant and tax-efficient.

Read on to find out how clients can keep 100% BR when moving from AIM to unquoted shares.

AIM shares now only qualify for 50% Business Relief

As of 6 April 2026, AIM shares qualify for 50% BR, rather than the previous 100% relief.

For many clients, this change could lead to greater Inheritance Tax (IHT) liability, and they may need to review their existing estate plan.

One option is to move from AIM investments into qualifying unquoted shares. Certain unquoted shares can still qualify for 100% BR, though they remain subject to the new combined BR and AR cap.

Indeed, a growing number of clients are considering this option to ensure their estate plans remain efficient, but it’s important that they do so with the right advice.

Replacement investments may initially qualify for only 50% Business Relief

When clients sell AIM shares and reinvest the proceeds into qualifying unquoted shares, the replacement relief rules may allow the new investment to inherit the BR of the original investment.

However, it’s important to note that when an investor does this, the new holding will initially inherit the BR rate of the original AIM investment.

As AIM shares now only qualify for 50% BR, the replacement investment will also initially receive 50% relief. It isn’t until the new unquoted investment has been held for two years that it can qualify for 100% BR in its own right.

So, clients considering a move away from AIM should understand there may be a transitional period during which full relief is not available.

Clients should be alert to key considerations                    

If your clients want to sell their AIM shares and reinvest in unquoted companies, they should be aware that:

• The two-year ownership rule still matters – To qualify for BR, they need to have owned the assets for at least two years before death.
• The £2.5 million cap on 100% relief applies – 100% BR will only apply to the first £2.5 million of qualifying BR and AR assets combined. Any qualifying assets above this threshold will receive 50% relief instead. However, couples can combine allowances, meaning they could pass on up to £5 million of BR- and AR-qualifying assets free from IHT.
• Replacement investments will initially only qualify for 50% BR – As discussed above, it will take two years for new investments in unquoted companies to qualify for 100% BR.

Financial planners and solicitors can help ensure efficiency and compliance under the new rules

Given the complexity of the new rules, it’s a good idea for clients to work with both a financial planner and a solicitor before making any changes to their estate plans.

Financial planners can help them decide whether their existing AIM investments are still suited to their goals. They can model the impact of the changes and oversee any transition into qualifying unquoted investments.

Meanwhile, solicitors can ensure that any adjustments to clients’ estate plans reflect their intentions and are legally compliant.

Get in touch

To find out more about how our sectors can coordinate for the benefit of our mutual clients, get in touch.

Email info@fbwealth.co.uk or call us on 0333 1122211.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, cashflow planning, or tax planning.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.