Many AIM-quoted shares can qualify for business relief from inheritance tax, because shares on the Alternative Investment Market are treated as unquoted for these rules. Until 5 April 2026 qualifying holdings could attract 100% relief once held for at least two years; for transfers on or after 6 April 2026 the rate falls to 50%.
That 50% rate applies in all cases to qualifying shares designated as not listed on a recognised stock exchange, such as AIM shares, and it sits outside the new £2,500,000 relief allowance introduced for other business and agricultural property (gov.uk, as at August 2026, subject to change). This guide explains how the relief works and what the change means. Figures are general information, not advice for any particular estate.
What is business relief on shares?
Business relief, sometimes called business property relief, reduces the value of certain business assets when working out inheritance tax, either during someone's lifetime or on death. Relief is given at either 100% or 50% depending on the asset (gov.uk, Business Relief for Inheritance Tax, as at August 2026, subject to change). Shares in an unquoted trading company are one of the asset types that can qualify, and shares admitted to trading on AIM are treated as unquoted for this purpose rather than as listed shares.
The relief is not automatic. The company must be carrying on a qualifying trade, and businesses that consist wholly or mainly of dealing in securities, stocks or shares, land or buildings, or the making or holding of investments, are generally excluded (gov.uk, what qualifies for Business Relief, as at August 2026, subject to change). So not every AIM company qualifies, and a holding that qualifies one year may not the next if the trade changes.
Which AIM shares can qualify
Two conditions are central. First, the shares must generally have been owned for at least two years before the transfer or death (gov.uk, as at August 2026, subject to change). Second, the underlying company must be a qualifying trading business rather than an investment business. The table below sets out the broad position.
| Feature | General position |
|---|---|
| Market status | AIM shares treated as unquoted for business relief |
| Minimum ownership period | Broadly two years before the transfer or death |
| Company type | Must be a qualifying trading company, not mainly investment |
| Rate to 5 April 2026 | Up to 100% on qualifying shares |
| Rate from 6 April 2026 | 50% on qualifying not-listed shares such as AIM |
Source: gov.uk/business-relief-inheritance-tax and gov.uk summary of reforms, as at August 2026, subject to change.
The change from 6 April 2026
At Autumn Budget 2024 the government announced reform of agricultural and business relief. From 6 April 2026, 100% relief applies to a combined allowance of qualifying agricultural and business property per person, with 50% relief on value above it. That allowance was set at £2,500,000 per person in an announcement on 23 December 2025, replacing the £1,000,000 figure first announced, and it is transferable between spouses and civil partners, giving up to £5,000,000 for a couple (gov.uk, as at August 2026, subject to change).
AIM shares sit apart from that structure. Shares designated as not listed on a recognised stock exchange, such as AIM shares, move to a flat 50% rate and are not affected by the £2,500,000 allowance (gov.uk, as at August 2026, subject to change). In practice this means qualifying AIM shares receive 50% relief from the first pound, rather than sharing in the 100% band. The new rates apply to lifetime transfers made on or after 30 October 2024 where the person giving the gift dies on or after 6 April 2026.
Points to weigh
Business relief can be a meaningful part of some estate plans, but AIM shares carry considerations beyond tax. The following points are general observations rather than recommendations.
- Investment risk. AIM companies are often smaller and can be more volatile than shares on the main market. Relief does not change the underlying investment risk.
- Qualification can change. A company can lose qualifying status if its trade changes, and relief is judged at the time of transfer or death, not when the shares were bought.
- The two-year clock. Shares generally need to have been held for at least two years, so timing matters (gov.uk, as at August 2026, subject to change).
- The 2026 rate cut. The move from 100% to 50% relief materially changes the tax position compared with earlier years.
- The wider estate. Relief on shares works alongside the nil-rate band and other reliefs, so it is best considered as part of a whole plan rather than in isolation.
Because the rules are detailed and the consequences of a mistake can be costly, this is an area where many people take advice from a suitably qualified professional. Our broader guide to inheritance tax sets the reliefs in context, our estate planning overview explains how the parts fit together, and it can be worth checking that your will reflects how you would like qualifying assets to pass. If you would like to discuss your circumstances, you are welcome to get in touch.
- AIM shares are treated as unquoted for business relief (gov.uk, as at August 2026, subject to change).
- Shares generally need to have been owned for around two years to qualify (gov.uk, as at August 2026, subject to change).
- Relief on qualifying AIM shares was up to 100% until 5 April 2026 and is 50% for transfers on or after 6 April 2026 (gov.uk, as at August 2026, subject to change).
- AIM shares are not affected by the £2,500,000 relief allowance (gov.uk, as at August 2026, subject to change).
Frequently asked questions
Do AIM shares qualify for business relief?
Many do, but not all. AIM shares are treated as unquoted for business relief, so shares in a qualifying trading company held for around two years can qualify. Companies that mainly deal in investments, securities, land or buildings are generally excluded (gov.uk, as at August 2026, subject to change).
What rate of business relief applies to AIM shares?
Qualifying AIM shares attracted up to 100% relief until 5 April 2026. For transfers on or after 6 April 2026 the rate is 50% on qualifying shares designated as not listed on a recognised stock exchange, such as AIM shares (gov.uk, as at August 2026, subject to change).
Do AIM shares count towards the £2.5 million relief allowance?
No. From 6 April 2026 a £2,500,000 allowance gives 100% relief to other qualifying business and agricultural property, but shares such as AIM shares are dealt with separately at a flat 50% rate and are not affected by that allowance (gov.uk, as at August 2026, subject to change).
How long must I hold AIM shares to qualify?
Business property generally needs to have been owned for at least two years before the transfer or death to qualify for relief. There are some exceptions, for example where property replaces other qualifying property (gov.uk, as at August 2026, subject to change).
Is business relief the same across the UK?
Inheritance tax and business relief are UK-wide and apply in the same way in England, Wales, Scotland and Northern Ireland. Other parts of estate administration differ, as Scotland uses confirmation rather than a grant of probate and has its own succession law, so cross-border estates can need local guidance (gov.uk, as at August 2026, subject to change).
Does business relief remove the investment risk of AIM shares?
No. Business relief only affects the inheritance tax position of qualifying shares. AIM companies can be smaller and more volatile than main-market shares, and the value of an investment can fall as well as rise, whatever the tax treatment.