1. Start Early — Much Earlier Than You Think
Succession isn’t a single document; it’s a long-term process. In the UK, experts recommend starting planning 5–7 years before transition to prepare both financially and emotionally.
According to PwC’s 2023 Family Business Survey, 67% of UK family business owners expect to retire or sell in the next decade, but fewer than 10% have a formal plan in place.
If retirement is even a consideration within the next ten years, it’s time to set your succession planning in motion.
2. Define What You’re Handing Over — and to Whom
Are you transferring full ownership, day-to-day management, or both? Succession can take several shapes:
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Full transfer of ownership to family members
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External leadership with family retaining majority control
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Gradual, phased handover
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Partial or full sale (to family trusts or external buyers)
The key is open dialogue. Discuss intentions early and ask essential questions:
Who truly wants to lead? Are they ready? How will decisions be made when opinions differ?
3. Align Your Legal and Financial Framework
Succession planning is deeply intertwined with tax and legal strategy. A robust framework preserves business value, avoids disputes, and ensures compliance with UK tax law.
Key considerations include:
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Shareholder Agreements – clarify ownership rights and exit terms.
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Estate Planning – make sure wills and trusts align with the succession plan.
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Tax Strategy – leverage Business Property Relief (BPR) and Gift Hold-Over Relief to minimise Inheritance Tax liabilities.
At RMC, we model different handover scenarios considering income tax, CGT, and IHT implications, ensuring your strategy is fully tax-efficient.
4. Prepare the Next Generation for Leadership
A handover doesn’t stop at signatures — it’s about transferring wisdom, trust, and confidence.
To prepare the next generation:
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Involve them in key strategic meetings
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Encourage external work experience and professional training
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Delegate gradual responsibilities
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Introduce non-family mentors for objective guidance
Transitioning leadership should be seen as a journey of empowerment, not entitlement.
5. Document Every Decision
Verbal promises lead to confusion later. Ensure clarity through written documentation such as:
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A Family Charter to define vision and values
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Governance rules detailing responsibilities
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Conflict resolution frameworks to preempt disputes
Many of our London clients find that family workshops—facilitated by neutral advisors—help align goals before final documentation is signed.
6. Keep Communication Open and Regular
Honest, transparent communication is key to a successful transition. Schedule family business meetings — ideally off-site — to separate operational discussions from family dynamics.
Involving an external facilitator, like an accountant or governance specialist, can help neutralise tension and maintain focus on long-term legacy building.
7. Review and Adapt Annually
Families grow, markets evolve, and objectives shift. Review your succession plan at least once a year — and especially after key life or business changes.
Updating regularly prevents small issues from becoming big problems.
Final Thoughts
Your business is more than an income stream — it’s your family’s story. By starting early, defining roles clearly, and seeking professional guidance, you give that story the best chance to continue for generations.
At RMC Accountants, we specialise in guiding London-based family businesses through this process with clarity, fairness, and foresight.
Ready to secure your legacy?
👉 Book your succession planning consultation today at https://rmcaccountants.co.uk/contact-us/