So far, these proposals do not change the inheritance tax treatment of family businesses. Reliefs such as Business Property Relief (BPR) still allow many family-owned businesses to be passed down with little or no inheritance tax. This relief is designed to keep trading businesses intact.
Why it still matters for family businesses
Even if BPR remains unchanged, succession planning can be complex. Families often face questions such as:
- How should ownership be structured for the next generation?
- What happens if the business is partly trading and partly investment?
- How do personal assets and business assets fit together in an estate?
Real-Life Example: Planning Ahead for the Next Generation
One of our clients (name changed for GDPR reasons) runs a successful interior design company. The parents wanted to think long-term about how the business could eventually be passed on to their children, who are still at school but may one day want to join the family business.
At first glance, inheritance tax looked worrying — the business was valued highly, and they were concerned that when the time came, their children might face a large tax bill that could put the business at risk.
As their accountants, we reviewed the situation and explained that Business Property Relief (BPR) did apply. With the right planning, the shares could be passed down in the future without inheritance tax becoming a burden.
We also helped them:
- Put in place a long-term ownership structure that would make succession easier when the children are ready to take part in the business
- Review personal and business assets separately to ensure clarity in estate planning
- Build flexibility into the succession plan so it can adapt as the children grow up and decide on their involvement
- The family now has peace of mind knowing that when the children are older, they can step into the business without unnecessary tax worries, and the parents’ legacy is protected for the next generation.
How a tax accountant can help
A tax accountant can support family businesses by:
- Reviewing succession and ownership structures
- Ensuring reliefs like BPR are properly secured
- Planning ahead in case rules change in future Budgets
- Helping families balance business continuity with personal wealth planning
Learn More
HMRC provides detailed guidance on inheritance tax, business relief and gifting rules:
- Inheritance Tax: overview. – embed the link if possible into the text https://www.gov.uk/inheritance-tax
- Business Relief for family businesses. https://www.gov.uk/business-relief-inheritance-tax/what-qualifies-for-business-relief
- Gifts and exemptions – the 7-year rule. https://www.gov.uk/inheritance-tax/gifts
These resources highlight just how complex the system can be — and why professional advice is often essential to get it right.
If you’d like to explore how this affects your family business, get in touch today.