The Changing Succession Landscape

Succession planning has always been a difficult topic for many due to the need to confront issues around death and the loss of someone special who has passed. But as the saying goes, ‘there is nothing more certain than death and taxes,’ and the proposed Budget has put the spotlight firmly on family businesses and in particular, Inheritance Tax on the passing of shares from one generation to the next.

Ownership succession and the implications are now firmly on the family business agenda and for many family business owners, consideration as to the timing and implications of the transfer of shares to the next generation is more important than ever before.

Family business leaders see themselves as custodians and stewards of their businesses for future generations, investing in the business for the long term, employing significant numbers of people, paying taxes and seeking to do business the right way, full of pride, passion and purpose.

The recent changes to Business Property Relief in the Autumn Budget, 2024 changes the rules that have previously enabled transfers of shares on the death of the shareholder in a family business to be exempt from Inheritance Tax. With effect from April 6th, 2026 the rules will change, removing the full exemption, meaning the estates of a deceased could be liable for significant IHT liabilities as a result.

As Paul Andrews, Founder & CEO of Family Business United explains, "Planning has never been more important and we have created this report to outline the changes and provide information to enable conversations to be started and to enable families in business to work and make decisions together."

"Conversations are now more important than ever and the report covers the situation as it was, the rules as we know them today, and some of the ways that any inheritance tax liability may be settled, together with insights into tax planning which may enable shares in a family business to be passed down to the next generation in a more effective manner."

"The rules have changed going forward and this report should provide a good starting point for conversations. Obviously, each family and family business is different and professional advice should be sought prior to any decisions being made but we hope that the report provides information and insight to allow conversations to take place. Time really is of the essence."

A copy of the final report is available to download here and is free to Family Business United members and digital subscribers. Find out more about becoming a member of Family Business United here or take out a digital subscription to access all areas and content available on the FBU platform.