Changes to Inheritance Tax announced – our response

The changes are a positive development and help to safeguard family-run hospitality businesses, the trade body said.

UKHospitality has welcomed the Government increasing the threshold for Business Property Relief (BPR) from £1m to £2.5m, when it is introduced in April 2026.

The trade body has been calling for the Government to bring forward changes that would better safeguard family-run hospitality businesses, particularly those in rural and coastal communities.

Almost half (47%) of hospitality businesses said they were affected by changes to BPR, and UKHospitality members have been central to illustrating the real-life impacts of changes to inheritance tax:

1
Oak Taverns had warned that their family-run business was no longer focusing on growth, but deciding which pub they would have to sell to pay the tax bill.
2
The Empire Hotel in Llandudno had warned it would ultimately close, rather than pay the tax bill.
3
Milsom Hotels & Restaurants said the original policy would result in job losses.

UKHospitality also highlighted that, while these changes are a positive development, it remains the case that many businesses will still be facing significant inheritance tax bills and that the Government should continue to engage with the sector on further solutions.

Our response

Kate Nicholls, Chair of UKHospitality, said: “Family-run businesses are part of what makes much of hospitality so special, with generation after generation taking on the family pub, restaurant or hotel to continue its legacy.

“The original changes to Business Property Relief put all of that at risk, with businesses up and down the country suddenly facing tax bills running into tens of thousands of pounds.

“We have worked extensively with the Treasury and MPs across Parliament to highlight the unintended consequences of this policy and the impact it could have on local communities, particularly in rural and coastal areas.

“I’m pleased these concerns have been heard loud and clear, and that the Government has acted. This does go some way to safeguarding family-run hospitality businesses. It’s critical this engagement with the sector continues, as there is still more that can be done.

“I’d like to particularly thank those members that have supported our work on this issue and shared very difficult and personal stories about what the impact could be on their business and their families. Those are the stories that hit home about how devastating the changes could be and why change was so urgent.”