Quietly, with as little fanfare as Rachel Reeves can manage, another Labour tax raid landed on 6 April 2026. From the start of this tax year, shares listed on the Alternative Investment Market - the AIM - are no longer protected from inheritance tax. Where there used to be a 100% relief, there is now a 20% inheritance tax charge. It's smaller than the 40% standard rate, which is the only reason ministers can claim with a straight face that they've been "generous."
They haven't. They've ambushed Britain's risk-takers, savers and family business owners. Again.
What AIM Is, and Why This Matters
AIM is the London Stock Exchange's growth market. It's where small and medium British companies - the engine room of our economy - go to raise capital. It's the start-ups, the scale-ups, the family firms that have just gone public. Until April this year, investing in qualifying AIM shares for at least two years carried full inheritance tax relief. That wasn't a tax loophole. It was a deliberate policy designed to channel private capital into the riskiest end of British enterprise.
Reeves has now scrapped that with the stroke of a pen. The result, predictable to anyone with a single year of City experience, has been an exodus. Capital has drained out of AIM and into safer havens - including, in too many cases, into companies listed in New York rather than London. We are exporting investment, jobs, and tax revenue, all to fund a political gesture.
The Family Business Hit
This raid does not just hurt anonymous fund managers. It hurts the family business owner whose company finally went public, the retired engineer who put his savings into British growth firms, the widow whose husband's nest egg was tied up in AIM stock. These are not the super-rich. They are precisely the people Labour spent the campaign promising to protect.
Combine this with the £1m cap on agricultural and business property relief that hits family farms and family firms, the dividend tax rises, and the frozen thresholds, and you have a coherent picture: a government that sees private wealth as something to be wrung dry rather than something to be encouraged.
Britain Cannot Tax Its Way to Growth
The IMF has already warned that the UK is approaching peak taxation. Productivity is flat. Wage growth is at a five-year low. Business investment is sluggish. And this is the moment Labour chooses to attack the one part of the capital markets that supports British scale-up companies.
It is not policy. It is vandalism with a spreadsheet. The Treasury thinks it'll raise about £100m a year from this measure. It will lose multiples of that in lost listings, lost growth and lost confidence. We've seen this film before. Every time a Labour chancellor goes after capital, the economy pays for years afterwards.
What Reform UK Would Do
Reform UK would restore full inheritance tax relief for qualifying AIM shares, restore the £1m cap thresholds for family farms and businesses, and stop punishing people who take risks with their own money to back British enterprise. We'd raise the personal allowance to £20,000, scrap the dividend tax raid, and abolish inheritance tax altogether for estates under £2m.
Labour's tax model is simple: punish the productive, reward the parasitic, and call it fairness. Reform UK's model is the opposite. You cannot have a strong country without strong family businesses, and you cannot have strong family businesses while the Treasury treats them as a piggy bank.