The Inheritance Tax changes and succession planning for family business owners

Recent Inheritance Tax (IHT) changes have led many family business owners to revisit their succession and estate planning. While this renewed focus on planning is welcome, the greatest risk we see in practice is that the planning is incomplete, reactive or poorly coordinated.

When succession planning is driven solely by headline tax figures, decisions are often made in isolation or under pressure. This can result in outcomes that are difficult to unwind – including family disputes, unintended loss of control, forced sales of business interests or structures that no longer reflect the family’s intentions.

The recent changes have highlighted how closely Inheritance Tax, business succession, governance and family dynamics are now intertwined.

Why has succession planning become more complex?

Succession planning for family businesses now extends far beyond deciding who will inherit the business. Increasingly, these considerations must now take into account the interaction between business and agricultural reliefs, trusts, pensions, ownership structures and shareholder arrangements – all needing to be optimised alongside the practical realities of family relationships.

We are seeing an increase in business owners reviewing their arrangements following IHT changes, but many are starting from an unprepared position.

Outdated Wills, informal succession plans and a lack of clarity around ownership and control remain common. In many cases, families simply do not have a clear understanding of how the business would be managed or transferred on death or incapacity, or who would be given decision‑making authority during transition.

Why early and coordinated planning matters

As the rules around IHT, business reliefs, trusts and pensions continue to evolve and intersect, succession planning has become increasingly nuanced. Decisions taken now will often have long‑term implications for tax efficiency, business continuity and family dynamics over the long term.

In our experience, business owners who plan early retain greater flexibility and control – and where planning is delayed, options are frequently more limited, tax exposure is higher and the process is significantly more disruptive for both the business and the family.

For this reason, early, structured advice is far more effective than reactive planning following further legislative change, ill health or another trigger event.

Given this complexity, succession planning should not be approached in isolation. Legal, tax, financial and corporate considerations must be aligned, with advisers working collaboratively to ensure the overall strategy is coherent and robust.

Key action points for family business owners following the IHT changes:

• Review your Will  – does it accurately reflect current business ownership, succession intentions and the impact of recent IHT changes, particularly where structures or reliefs have evolved?
• Consider how control and ownership of the business would pass on death or incapacity, and whether existing arrangements support continuity without forcing a sale or creating uncertainty
• Review any reliance on business or agricultural reliefs and consider how changes in trading activity, ownership or legislation could affect their availability over time
• Assess existing trust arrangements to ensure they remain effective and properly aligned with your Will, business interests and long‑term succession objectives
• Review pension death benefit nominations as part of your wider estate planning to ensure they do not undermine succession or tax planning
• Consider whether additional planning tools, such as trusts or family investment companies, could help manage inheritance tax exposure while balancing control and succession
• Ensure that shareholder agreements and governance arrangements support succession planning, including decision‑making powers and restrictions on transfers
• Review Lasting Powers of Attorney (LPAs) to ensure business interests are covered (and appropriate individuals can act if capacity is lost)
• Take advice early rather than waiting for further tax changes or a trigger event, as early planning generally preserves greater choice and control
• Ensure professional advisers are working together so that succession, tax and governance planning are approached as a single, coordinated exercise

Our role

At Price Slater Gawne, our experienced Wealth Protection team regularly advises family business owners and private clients on succession and estate planning in the context of changing tax and legislative environments.

We work closely with clients to review existing arrangements, identify areas of risk and develop practical strategies that protect both the business and the family.

Our advice commonly includes reviewing Wills and trusts, advising on succession planning for family‑owned businesses, aligning estate planning with business and pension structures, and working alongside other professional advisers to deliver joined‑up solutions.

Next steps

The IHT changes present a valuable opportunity for business owners to strengthen succession planning and take a more structured approach to succession, before further legislative change or a trigger event reduces the options.

If you’re a family business owner and would like a structured review of your succession and estate planning, our dedicated Wealth protection experts would be pleased to assist. Early advice often enables more effective outcomes and greater certainty for the future.

Contact us on 03333 058375, or via email [email protected], for a no-obligation consultation on meeting your succession goals and requirements.