With the UK government’s recent decision to reduce Business Property Relief (BPR) from 100% to 50% by April 2026, family businesses face a significant shift in how inheritance tax (IHT) will impact their long-term planning. This change could expose many family-owned businesses to substantial tax liabilities for the first time in decades, potentially forcing early retirement through premature asset sales or even business divestment to meet tax obligations.
In this evolving landscape, proactive succession planning is more critical than ever. The key to this planning lies in early, open, and structured communication, supported by a clear, long-term strategy that balances family dynamics with business needs. As experienced advisors to family-owner managed businesses, we find the following six considerations are key to successful plans and implementation:
Succession is a process, not an event. Starting at least 10 years in advance allows time to:
Family dynamics can complicate business decisions. A neutral facilitator can help:
Using structured tools and methods, family businesses should:
Succession isn’t just about passing the baton - it’s about preparing the next runner. This includes:
Documenting the plan ensures clarity and accountability. This includes:
Family and business circumstances change. A good succession plan is:
With the continual shifts in the economic and political landscape, combined with the upcoming changes to BPR, starting the conversation early is not just wise - it’s essential.
We can help you navigate the complexities of generational transition, assisting in creating and implementing a cohesive and actionable strategy. Please get in touch with Jack Edmonds or your usual Crowe contact to discuss further.
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