For Financial Advisers Only. This tool is designed for use by UK-regulated financial advisers and is not intended for retail investors.
AIM BPR drops to 50% in April 2026. EIS stays at 100%.
From April 2026, AIM shares receive only 50% Business Property Relief — effective 20% IHT. EIS-qualifying shares retain 100% BPR within the £2.5m per-estate cap. For clients holding AIM primarily for estate planning, the maths has changed.
AIM vs EIS — the BPR comparison.
From April 2026, AIM loses half its IHT advantage. EIS retains full 100% BPR.
AIM BPR (From April 2026)
100% → 50%
Effective IHT rate on AIM: 0% → 20%. October 2024 Budget.
EIS BPR
100%
Unchanged. Full exemption within the £2.5m per-estate cap.
Income Tax Relief
30%
Immediate tax refund on transition to EIS. Not available for AIM.
Upgrade from 50% BPR to 100% BPR — and get 30% tax relief.
Upgrade from 50% BPR to 100% BPR — and get 30% tax relief.
Your client sells AIM holdings and invests the proceeds into EIS-qualifying shares. The CGT on the AIM sale is deferred under Schedule 5B. The client receives 30% income tax relief on the EIS investment — cash back that AIM never provided.
After 2 years, the EIS holding qualifies for 100% BPR. At death: deferred CGT eliminated, EIS passes IHT-free, and beneficiaries inherit at market value. The transition converts a 50% BPR asset into a 100% BPR asset with an immediate 30% tax relief bonus.
Who this calculator is for
Clients who hold AIM shares primarily for estate planning (BPR) and need to understand the impact of the April 2026 BPR changes. The estate is substantial and exposed to IHT. The client can afford to lose the EIS investment (high-risk) and has a 5+ year investment horizon. Combined BPR assets are within the £2.5m per-estate cap.
AIM to EIS in three steps
Sell AIM, invest in EIS
CGT on AIM gains is deferred into EIS (Schedule 5B, TCGA 1992). 30% income tax relief received immediately.
After 2 years: 100% BPR
EIS qualifies for full Business Property Relief (s.105 IHTA 1984, 2-year minimum per s.106). AIM drops to 50% from April 2026 (FA 2024).
At death: full elimination
Deferred CGT eliminated (Sch 5B para 4). No IHT on EIS (100% BPR). Beneficiaries inherit at market value (s.62 TCGA 1992).
What your client gains vs gives up
What Your Client Gains
- +100% BPR retained (vs 50% on AIM from April 2026)
- +30% income tax relief on EIS investment
- +CGT on AIM gains deferred indefinitely
- +Deferred CGT eliminated at death (Schedule 5B)
- +Tax-free growth on EIS after 3 years (s.150A TCGA)
What Your Client Gives Up
- −Liquidity: AIM is tradeable; EIS is not
- −Capital certainty: EIS is high-risk venture investment
- −Flexibility: 3-year minimum hold for tax relief retention
- −Market exposure: leaving a known portfolio for unknown EIS
- −Immediate access: funds locked in illiquid investments
Section 107(2) IHTA 1984 — Replacement Property Relief
Section 107(2) allows the BPR ownership period of a sold asset (AIM) to carry forward to its replacement (EIS) if certain conditions are met. Without this relief, new EIS shares receive 0% BPR until the 2-year ownership condition (s.106) is met — a significant vulnerability window. However, where the replaced asset (AIM) only attracts 50% relief post-April 2026, replacement relief may preserve that lower rate until the new EIS holding meets the 2-year test independently. Specialist tax advice is essential.
Key requirement: The EIS shares must be a genuine replacement — same person investing, and the replacement must occur within a reasonable timeframe. If your client sits on cash for an extended period before investing in EIS, s.107(2) may not apply. Specialist tax advice is essential.
Model it for your client
Adjust the inputs to see the impact of transitioning from AIM to EIS.
What happens when your client transitions
- ✓CGT eliminated (£72,000 saved)
- ✓100% BPR — no IHT on EIS
- ✓30% relief cash kept (£300,000)
- •Deferred CGT crystallises (£72,000)
- •30% relief already received (£300,000)
- •Loss relief at 45%: £315,000
- •Portfolio value: £1,000,000
- •50% BPR → 20% effective IHT
- •IHT payable: £200,000
Break-even return
0.62×The EIS investment only needs to return 62p per £1 to match what heirs receive if AIM is kept. Anything above this and heirs are better off with EIS.
Full comparison: Keep AIM vs Transition to EIS
| Keep AIM | Transition to EIS | |
|---|---|---|
| Portfolio / EIS holding | £1,000,000 | £1,000,000 |
| Cash from income tax relief | — | +£300,000 |
| CGT liability | — | £72,000 (deferred) |
| BPR rate | 50% | 100% |
| IHT payable | -£200,000 | -£0 |
| Relief cash in estate | — | +£300,000 |
| Net relief cash (after 40% IHT) | — | +£180,000 |
| Net to heirs (at 1×) | £800,000 | £1,180,000 |
All return scenarios (0×–3×)
| EIS Return | Keep AIM | Transition to EIS | Difference |
|---|---|---|---|
| 0× (total loss) | £800,000 | £180,000 | -£620,000 |
| 0.62× (break-even) | £800,000 | £800,000 | +£0 |
| 1× (capital returned) | £800,000 | £1,180,000 | +£380,000 |
| 2× | £800,000 | £2,180,000 | +£1,380,000 |
| 3× | £800,000 | £3,080,000 | +£2,280,000 |
Returns are not guaranteed. EIS is a high-risk investment. Past performance is not a reliable indicator of future results.
AIM to EIS — the details
Is this transition right for your client?
Most Suitable For
- ✓Client holds AIM primarily for estate planning (BPR)
- ✓Estate is substantial and exposed to IHT
- ✓Client can afford to lose the EIS investment (high-risk)
- ✓Client has a 5+ year investment horizon
- ✓Client values 30% income tax relief on the transition
- ✓Combined BPR assets within £2.5m per-estate cap
Key Risks to Consider
- ⚠Total loss of capital: EIS is high-risk venture investment
- ⚠Illiquidity: No secondary market; expected hold 7–10 years
- ⚠24-month window: If transitioning after April 2026 without s.107(2)
- ⚠Tax relief clawback: Relief withdrawn if shares sold within 3 years
- ⚠BPR uncertainty: Rules and rates may change
- ⚠£2.5m cap: Shared across all BPR assets including remaining AIM
- ⚠CGT crystallisation: If EIS fails during lifetime, deferred CGT payable
- ⚠FSCS not applicable
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This tool is for illustrative purposes only and does not constitute financial advice. EIS investments carry significant risks, including loss of capital, illiquidity, and the potential for HMRC to withdraw tax reliefs. Tax treatment depends on individual circumstances and may be subject to change.
Past performance is not a reliable indicator of future results. The value of investments and income from them can go down as well as up and investors may not get back the amount originally invested.
Ascension Ventures is authorised and regulated by the Financial Conduct Authority (FRN: 833506). Tax reliefs referred to are those applying under current legislation, which may change. The availability of tax reliefs depends on individual circumstances.