diff --git a/projects/aca-folder-rules/assets/i18n/en.json b/projects/aca-folder-rules/assets/i18n/en.json
index 18b93d403..e78462cf9 100644
--- a/projects/aca-folder-rules/assets/i18n/en.json
+++ b/projects/aca-folder-rules/assets/i18n/en.json
@@ -95,7 +95,8 @@
           "CREATE_RULE": "Create rule",
           "LINK_RULES": "Link rules",
           "EDIT_RULE": "Edit",
-          "SEE_IN_FOLDER": "See in folder"
+          "SEE_IN_FOLDER": "See in folder",
+          "INHERIT_RULES": "Inherit rules"
         }
       },
       "EMPTY_RULES_LIST": {
diff --git a/projects/aca-folder-rules/src/lib/manage-rules/manage-rules.smart-component.html b/projects/aca-folder-rules/src/lib/manage-rules/manage-rules.smart-component.html
index 9c8607b62..83ea528e3 100644
--- a/projects/aca-folder-rules/src/lib/manage-rules/manage-rules.smart-component.html
+++ b/projects/aca-folder-rules/src/lib/manage-rules/manage-rules.smart-component.html
@@ -26,6 +26,17 @@
                               class="aca-manage-rules__actions-bar__title__breadcrumb"></adf-breadcrumb>
             </adf-toolbar-title>
 
+            <mat-slide-toggle
+              data-automation-id="manage-rules-inheritance-toggle-button"
+              [checked]="isInheritanceEnabled"
+              (change)="onInheritanceToggleChange($event)"
+              [disabled]="isInheritanceToggleDisabled"
+              [labelPosition]="'before'">
+              {{ 'ACA_FOLDER_RULES.MANAGE_RULES.TOOLBAR.ACTIONS.INHERIT_RULES' | translate }}
+            </mat-slide-toggle>
+
+            <mat-divider vertical class="vertical-divider"></mat-divider>
+
             <div class="aca-manage-rules__actions-bar__buttons">
               <button
                 *ngIf="!(mainRuleSet$ | async)"
diff --git a/projects/aca-folder-rules/src/lib/manage-rules/manage-rules.smart-component.scss b/projects/aca-folder-rules/src/lib/manage-rules/manage-rules.smart-component.scss
index f50d24ff3..024af5d02 100644
--- a/projects/aca-folder-rules/src/lib/manage-rules/manage-rules.smart-component.scss
+++ b/projects/aca-folder-rules/src/lib/manage-rules/manage-rules.smart-component.scss
@@ -17,7 +17,18 @@
     &__buttons {
       display: flex;
       align-items: stretch;
-      gap: 4px;
+      gap: 12px;
+    }
+
+    .mat-slide-toggle-label {
+      font-weight: 600;
+      font-size: 14px;
+      color: var(--adf-breadcrumb-item-active-color);
+    }
+
+    .vertical-divider {
+      height: 50%;
+      margin: 0 12px;
     }
   }
 
diff --git a/projects/aca-folder-rules/src/lib/manage-rules/manage-rules.smart-component.spec.ts b/projects/aca-folder-rules/src/lib/manage-rules/manage-rules.smart-component.spec.ts
index 13052ef7e..fadd9fb45 100644
--- a/projects/aca-folder-rules/src/lib/manage-rules/manage-rules.smart-component.spec.ts
+++ b/projects/aca-folder-rules/src/lib/manage-rules/manage-rules.smart-component.spec.ts
@@ -36,7 +36,7 @@ import { owningFolderIdMock, owningFolderMock } from '../mock/node.mock';
 import { MatDialog } from '@angular/material/dialog';
 import { ActionsService } from '../services/actions.service';
 import { FolderRuleSetsService } from '../services/folder-rule-sets.service';
-import { ruleMock } from '../mock/rules.mock';
+import { ruleMock, ruleSettingsMock } from '../mock/rules.mock';
 import { Store } from '@ngrx/store';
 
 describe('ManageRulesSmartComponent', () => {
@@ -229,4 +229,43 @@ describe('ManageRulesSmartComponent', () => {
       expect(createButton).toBeFalsy();
     });
   });
+
+  describe('Rule inheritance toggle  button', () => {
+    beforeEach(() => {
+      folderRuleSetsService.folderInfo$ = of(owningFolderMock);
+      folderRuleSetsService.inheritedRuleSets$ = of([]);
+      folderRuleSetsService.isLoading$ = of(false);
+      actionsService.loading$ = of(false);
+    });
+
+    it('should show inherit rules toggle button, and disable it when isInheritanceToggleDisabled = true', () => {
+      fixture.detectChanges();
+
+      const createButton = debugElement.query(By.css(`[data-automation-id="manage-rules-inheritance-toggle-button"]`));
+      expect(createButton).toBeTruthy();
+
+      component.isInheritanceToggleDisabled = true;
+      fixture.detectChanges();
+
+      expect(createButton.nativeNode.classList).toContain('mat-disabled');
+    });
+
+    it('should call onInheritanceToggleChange() on change', () => {
+      const onInheritanceToggleChangeSpy = spyOn(component, 'onInheritanceToggleChange').and.callThrough();
+      const updateRuleSettingsSpy = spyOn(folderRulesService, 'updateRuleSettings').and.returnValue(Promise.resolve(ruleSettingsMock));
+      const loadRuleSetsSpy = spyOn(folderRuleSetsService, 'loadRuleSets').and.callThrough();
+
+      fixture.detectChanges();
+
+      const inheritanceToggleBtn = fixture.debugElement.query(By.css(`[data-automation-id="manage-rules-inheritance-toggle-button"]`));
+
+      inheritanceToggleBtn.nativeElement.dispatchEvent(new Event('change'));
+
+      fixture.detectChanges();
+
+      expect(onInheritanceToggleChangeSpy).toHaveBeenCalled();
+      expect(updateRuleSettingsSpy).toHaveBeenCalledTimes(1);
+      expect(loadRuleSetsSpy).toHaveBeenCalledTimes(1);
+    });
+  });
 });
diff --git a/projects/aca-folder-rules/src/lib/manage-rules/manage-rules.smart-component.ts b/projects/aca-folder-rules/src/lib/manage-rules/manage-rules.smart-component.ts
index 04abdc58f..f897ad813 100644
--- a/projects/aca-folder-rules/src/lib/manage-rules/manage-rules.smart-component.ts
+++ b/projects/aca-folder-rules/src/lib/manage-rules/manage-rules.smart-component.ts
@@ -40,6 +40,7 @@ import { ActionsService } from '../services/actions.service';
 import { FolderRuleSetsService } from '../services/folder-rule-sets.service';
 import { RuleSet } from '../model/rule-set.model';
 import { RuleSetPickerSmartComponent } from '../rule-set-picker/rule-set-picker.smart-component';
+import { MatSlideToggleChange } from '@angular/material/slide-toggle';
 
 @Component({
   selector: 'aca-manage-rules',
@@ -50,6 +51,8 @@ import { RuleSetPickerSmartComponent } from '../rule-set-picker/rule-set-picker.
 })
 export class ManageRulesSmartComponent implements OnInit, OnDestroy {
   nodeId = '';
+  isInheritanceEnabled = true;
+  isInheritanceToggleDisabled = false;
 
   mainRuleSet$: Observable<RuleSet>;
   inheritedRuleSets$: Observable<RuleSet[]>;
@@ -93,6 +96,10 @@ export class ManageRulesSmartComponent implements OnInit, OnDestroy {
     this.route.params.subscribe((params) => {
       this.nodeId = params.nodeId;
       if (this.nodeId) {
+        this.folderRulesService.getRuleSettings(this.nodeId).then((ruleSettings) => {
+          this.isInheritanceEnabled = ruleSettings.value;
+        });
+
         this.folderRuleSetsService.loadRuleSets(this.nodeId);
       }
     });
@@ -153,6 +160,14 @@ export class ManageRulesSmartComponent implements OnInit, OnDestroy {
     await this.folderRulesService.updateRule(this.nodeId, rule.id, { ...rule, isEnabled });
   }
 
+  async onInheritanceToggleChange(event: MatSlideToggleChange) {
+    this.isInheritanceToggleDisabled = true;
+    const ruleSettings = await this.folderRulesService.updateRuleSettings(this.nodeId, '-isInheritanceEnabled-', { value: event.checked });
+    this.isInheritanceEnabled = ruleSettings.value;
+    this.folderRuleSetsService.loadRuleSets(this.nodeId);
+    this.isInheritanceToggleDisabled = false;
+  }
+
   onRuleDeleteButtonClicked(rule: Rule) {
     this.matDialogService
       .open(ConfirmDialogComponent, {
diff --git a/projects/aca-folder-rules/src/lib/mock/rules.mock.ts b/projects/aca-folder-rules/src/lib/mock/rules.mock.ts
index 295a196f8..b06a7c046 100644
--- a/projects/aca-folder-rules/src/lib/mock/rules.mock.ts
+++ b/projects/aca-folder-rules/src/lib/mock/rules.mock.ts
@@ -23,7 +23,7 @@
  * along with Alfresco. If not, see <http://www.gnu.org/licenses/>.
  */
 
-import { Rule } from '../model/rule.model';
+import { Rule, RuleSettings } from '../model/rule.model';
 import { RuleGroupingItem } from '../model/rule-grouping-item.model';
 
 export const getRulesResponseMock = {
@@ -170,3 +170,8 @@ export const ruleListGroupingItemsMock: RuleGroupingItem[] = [
     rule: ruleMock('rule2')
   }
 ];
+
+export const ruleSettingsMock: RuleSettings = {
+  value: false,
+  key: '-parameter-'
+};
diff --git a/projects/aca-folder-rules/src/lib/model/rule.model.ts b/projects/aca-folder-rules/src/lib/model/rule.model.ts
index 466989b0d..d8018a71a 100644
--- a/projects/aca-folder-rules/src/lib/model/rule.model.ts
+++ b/projects/aca-folder-rules/src/lib/model/rule.model.ts
@@ -58,3 +58,8 @@ export interface RuleForForm {
   actions: RuleAction[];
   options: RuleOptions;
 }
+
+export interface RuleSettings {
+  value: boolean;
+  key?: string;
+}
diff --git a/projects/aca-folder-rules/src/lib/services/folder-rule-sets.service.ts b/projects/aca-folder-rules/src/lib/services/folder-rule-sets.service.ts
index d976b4b1c..f390e4c67 100644
--- a/projects/aca-folder-rules/src/lib/services/folder-rule-sets.service.ts
+++ b/projects/aca-folder-rules/src/lib/services/folder-rule-sets.service.ts
@@ -68,7 +68,7 @@ export class FolderRuleSetsService {
   inheritedRuleSets$: Observable<RuleSet[]> = this.inheritedRuleSetsSource.asObservable();
   hasMoreRuleSets$: Observable<boolean> = this.hasMoreRuleSetsSource.asObservable();
   folderInfo$: Observable<NodeInfo> = this.folderInfoSource.asObservable();
-  isLoading$ = this.isLoadingSource.asObservable();
+  isLoading$: Observable<boolean> = this.isLoadingSource.asObservable();
 
   selectedRuleSet$ = this.folderRulesService.selectedRule$.pipe(
     map((rule: Rule) => {
diff --git a/projects/aca-folder-rules/src/lib/services/folder-rules.service.spec.ts b/projects/aca-folder-rules/src/lib/services/folder-rules.service.spec.ts
index 8becc0f80..22d62fd75 100644
--- a/projects/aca-folder-rules/src/lib/services/folder-rules.service.spec.ts
+++ b/projects/aca-folder-rules/src/lib/services/folder-rules.service.spec.ts
@@ -27,7 +27,15 @@ import { TestBed } from '@angular/core/testing';
 import { CoreTestingModule } from '@alfresco/adf-core';
 import { of } from 'rxjs';
 import { FolderRulesService } from './folder-rules.service';
-import { getMoreRulesResponseMock, getRulesResponseMock, manyRulesMock, moreRulesMock, ruleMock, rulesMock } from '../mock/rules.mock';
+import {
+  getMoreRulesResponseMock,
+  getRulesResponseMock,
+  manyRulesMock,
+  moreRulesMock,
+  ruleMock,
+  ruleSettingsMock,
+  rulesMock
+} from '../mock/rules.mock';
 import { ruleSetMock } from '../mock/rule-sets.mock';
 import { expect } from '@angular/flex-layout/_private-utils/testing';
 import { owningFolderIdMock } from '../mock/node.mock';
@@ -44,6 +52,8 @@ describe('FolderRulesService', () => {
   const { id, ...mockedRuleWithoutId } = mockedRule;
   const mockedRuleEntry = { entry: mockedRule };
   const ruleId = mockedRule.id;
+  const mockedRuleSettingsEntry = { entry: ruleSettingsMock };
+  const key = ruleSettingsMock.key;
 
   beforeEach(() => {
     TestBed.configureTestingModule({
@@ -138,4 +148,18 @@ describe('FolderRulesService', () => {
     const result = await folderRulesService.updateRule(nodeId, ruleId, mockedRule, ruleSetId);
     expect(result).toEqual(mockedRule);
   });
+
+  it('should send correct GET request and return rule settings', async () => {
+    callApiSpy.withArgs(`/nodes/${nodeId}/rule-settings/${key}`, 'GET').and.returnValue(Promise.resolve(mockedRuleSettingsEntry));
+
+    const result = await folderRulesService.getRuleSettings(nodeId, key);
+    expect(result).toEqual(ruleSettingsMock);
+  });
+
+  it('should send correct PUT request to update rule settings and return them', async () => {
+    callApiSpy.withArgs(`/nodes/${nodeId}/rule-settings/${key}`, 'PUT', ruleSettingsMock).and.returnValue(Promise.resolve(mockedRuleSettingsEntry));
+
+    const result = await folderRulesService.updateRuleSettings(nodeId, key, ruleSettingsMock);
+    expect(result).toEqual(ruleSettingsMock);
+  });
 });
diff --git a/projects/aca-folder-rules/src/lib/services/folder-rules.service.ts b/projects/aca-folder-rules/src/lib/services/folder-rules.service.ts
index dafa7d365..7a9e683c7 100644
--- a/projects/aca-folder-rules/src/lib/services/folder-rules.service.ts
+++ b/projects/aca-folder-rules/src/lib/services/folder-rules.service.ts
@@ -27,7 +27,7 @@ import { Injectable } from '@angular/core';
 import { AlfrescoApiService } from '@alfresco/adf-core';
 import { BehaviorSubject, from, Observable } from 'rxjs';
 import { finalize, map } from 'rxjs/operators';
-import { Rule, RuleForForm, RuleOptions } from '../model/rule.model';
+import { Rule, RuleForForm, RuleOptions, RuleSettings } from '../model/rule.model';
 import { RuleCompositeCondition } from '../model/rule-composite-condition.model';
 import { RuleSimpleCondition } from '../model/rule-simple-condition.model';
 import { RuleSet } from '../model/rule-set.model';
@@ -152,6 +152,16 @@ export class FolderRulesService {
     );
   }
 
+  async getRuleSettings(nodeId: string, key: string = '-isInheritanceEnabled-'): Promise<RuleSettings> {
+    const response = await this.callApi(`/nodes/${nodeId}/rule-settings/${key}`, 'GET');
+    return response.entry;
+  }
+
+  async updateRuleSettings(nodeId: string, key: string, body: RuleSettings): Promise<RuleSettings> {
+    const response = await this.callApi(`/nodes/${nodeId}/rule-settings/${key}`, 'PUT', { ...body });
+    return response.entry;
+  }
+
   private formatRules(res): Rule[] {
     return res.list.entries.map((entry) => this.formatRule(entry.entry));
   }