The New Road Ahead
Picture your business as a car cruising along a smooth highway. You’ve tuned the engine for steady growth and expect the value to rise each year. But just ahead, in April 2026, a new sign looms into view, “IHT Reset: 1 Mile.” That’s the moment the inheritance-tax gradient steepens. From then on, Business Property Relief (BPR) will cover only the first £1 million of qualifying shares at 100%, with the rest granted just 50% relief, meaning an effective 20% tax on everything above.
For many business owners, that junction will feel like the hill suddenly got steeper. If you keep accelerating with the same setup, you’ll burn more fuel in taxes. The smart driver changes gear early, and that’s what freezers share allows you to do.
Why Traditional Family Trusts Might No Longer Win the Race
For most families below £50 million, a fully-staffed family office isn’t even on the table. Wealth managers and advisers might mention multi-family offices, but those only make financial sense at an institutional scale. Families with a few million in business value, say £3 million to £20 million, usually rely on simple tools: outright gifts, discretionary trusts, life insurance to pay the IHT bill, and sometimes a little borrowing.
The problem is that none of these truly solves the IHT drag. Gifts eat into your control, trusts often trigger charges or lose Business Property Relief, and insurance only patches the symptom by paying the bill, not shrinking it. Even pensions will count toward your taxable estate soon.
So when the IHT reset hits, these traditional trust-based methods won’t win the race. They’re like heavy trailers pulling behind you, expensive, slow to manoeuvre, and doing little to improve performance. The freezer-share approach, by contrast, re-engineers the vehicle itself.
Freezer Shares Explained, How They Work
Think of freezer shares as the gearbox that locks in today’s value and shifts future growth elsewhere. You set the “speed limit” of your estate now, so any future acceleration passes to others without creating extra drag.
Here’s how it works in practice:
- Your trading company is valued at £5 million.
- You convert existing shares into freezer shares, entitled to that fixed £5 million value or a defined hurdle.
- You issue growth shares that carry rights only to value above the hurdle.
- The founder (or older generation) keeps the freezer shares, securing income and control, while the next generation, or a trust, holds the growth shares.
When the business grows to £8 million, the additional £3 million belongs to the growth shareholders, not the founder's estate. The estate remains “frozen” at the £5 million hurdle, protecting it from future IHT exposure.
It’s like putting your business on cruise control at today’s value while letting your children drive the new horsepower.
Why Freezer Shares Outperform Family Trusts under the Reset
Estate value capped: The freezer share fixes the founder’s value now. Any later rise sits outside the taxable estate. After 2026, this keeps exposure to the new 20% rate minimal.
Control preserved: Unlike gifts into trusts, you keep your voting rights and dividends through freezer shares. The company remains under your direction, not that of a trustee.
Eligibility for reliefs maintained: Freezer shares within a trading company can still qualify for BPR, whereas many trust setups fail the trading-asset test.
Built-in succession: Growth shares create a natural transfer path. They reward future effort and participation without inflating the founder’s estate.
In short, while family trusts might once have been the estate-planning vehicle of choice, freezer-share structures are more like hybrid engines, lighter, cleaner, and more efficient for modern conditions.
Freezer-share structures must be carefully engineered.
- Valuation accuracy: The hurdle value must be defensible and supported by credible evidence. HMRC will challenge inflated or unrealistic figures.
- Trading integrity: To retain BPR, your company must remain “wholly or mainly trading.” Avoid drifting into pure investment activity.
- Legal drafting: Share rights schedules, articles, and shareholder agreements require professional design. Boilerplate templates can create future disputes.
- Timing: The closer we get to April 2026, the less room remains to structure calmly and evidence the business rationale.
- over form: HMRC can disregard artificial arrangements. The freezer mechanism must reflect real commercial logic, not paper shuffling.
A gearbox works only if the engine and wheels are correctly aligned.
Practical Steps for Business Owners
- Assess your business value now. Model what happens under both 100% and 50% BPR relief after the reset.
- Check your trading status. Review assets and activities to confirm you’re not “mainly investment.”
- Design share classes. Introduce freezer, growth and possibly voting or dividend variants that reflect your objectives.
- Involve professional support. Accountants, valuers, and legal drafters should work together to coordinate the documents.
- Consider family participation. Decide who receives growth shares, direct family members, a family benefit trust, or an employee trust.
- Review governance annually. Keep minutes, valuations, and trading evidence up to date.
Closing – Shift Before the Hill
When the 2026 IHT Reset arrives, standing still means rolling backwards. Families worth £3 million to £50 million can no longer rely on traditional trusts or expensive family-office setups to guard their wealth. The freezer-share structure within a Mural Crown Self-Administered Family Office offers a practical alternative, locking in control, shifting future growth away from the taxable estate, and preserving reliefs.
You don’t need a convoy of advisers to climb this hill. You just need a sharper gearbox. Freeze the value today, pass the growth forward, and keep the engine under your own hand.
