Succession and family

Earlier than most do. Many reliefs depend on time: inheritance tax Business Relief generally needs shares to have been owned for two years, gifts usually fall out of an estate only after seven years, and a group needs to stay trading to keep its reliefs. Starting years before you plan to step back gives room to pass value on gradually rather than all at once.

Often, yes. Control usually follows votes rather than value, so options include giving non-voting or growth shares, keeping a majority of the votes yourself, or putting shares into a trust where you're one of the trustees. Care is needed, because keeping a benefit from shares you've given away can mean they stay in your estate for inheritance tax.

Their shares pass under their will, or the intestacy rules if there isn't one, which may not be to the people best placed to run the business. Inheritance tax may be due if Business Relief doesn't cover the full value. The articles or a shareholders' agreement may give other shareholders rights to buy the shares, and the remaining owners may have to fund that.

Yes. A will can direct shares to the right people or into a trust, make sure Business Relief is used where it's most valuable, and avoid shares passing to someone who doesn't want them. Shareholders should also consider a lasting power of attorney covering business decisions, so the company isn't stuck if an owner loses capacity. Wills should be reviewed after any restructure.

Fair doesn't always mean equal shares in the company. Options include giving the working children the shares and the others different assets, using separate share classes so voting control and dividend rights are split differently, or using a holding company structure to separate the trade from investments or property. A demerger can sometimes give each branch of the family its own business.

Each has trade-offs. A lifetime gift is a disposal for capital gains tax, but holdover relief is often available for shares in a trading company or the holding company of a trading group, and the gift falls out of your estate after seven years. Shares left on death are revalued for capital gains tax, but inheritance tax may apply if relief doesn't cover them.

Because inheritance tax Business Relief changed on 6 April 2026. Full relief now applies only to the first £2.5m of combined business and agricultural property per person, with 50% relief above that, although unused allowance can pass to a spouse or civil partner. For owners of valuable companies, inheritance tax may now be due where it wasn't before, so lifetime planning matters more.

Usually alongside or above it, owned by family members and used to hold investments and, sometimes, shares. Parents can keep control through voting shares while children hold shares that benefit from growth. It's a way of passing on future value gradually rather than giving away the business all at once. The tax treatment depends on how it's funded and who owns it.

Yes, but children under 18 can't easily hold shares in their own names, so shares are usually held for them by trustees under a bare trust or a formal trust. Income from shares a parent gives to their own minor child can be taxed as the parent's income if it's over £100 a year. That rule doesn't apply to gifts from grandparents.

Then succession may mean a sale rather than a handover. Options include selling to a trade buyer, to the management team or to an employee ownership trust, while the family keeps the proceeds, perhaps in a holding company or family investment company. Planning ahead lets the family take the proceeds in the most efficient way and decide how to share them between generations.

Yes, although they need care. A trust can hold shares for children or grandchildren while trustees keep control, which helps where beneficiaries are young. Most trusts face inheritance tax charges on entry, every ten years and when assets leave, but Business Relief can reduce those charges for qualifying trading company shares. The April 2026 relief cap applies to trusts too.

Transfers between spouses and civil partners who live together are generally free of capital gains tax and, for most couples, of inheritance tax. That makes rebalancing shareholdings between spouses a common first step, so both can use their own allowances and reliefs. Each spouse needs to meet the relief conditions in their own right, such as working in the business for some sale reliefs.

Start with what everyone wants: whether the business should stay in the family, who wants to run it, how much income the parents need and how fairly the children should be treated. The tax options follow from those answers. A meeting with an adviser present can help keep the discussion practical. Write down the decisions so they can be reflected in wills and agreements.

Usually, yes. A shareholders' agreement written for the founders may not deal with new family shareholders, such as what happens if one leaves the business, divorces or wants to sell. Updating it alongside any gift of shares helps protect the business. Clauses about who can hold shares, how they're valued and how dividends are decided are particularly important in a family company.

Shares are valued at their open market value at the date of the gift or death. A minority holding is usually worth less per share than a controlling one, because it carries less power, so how shares are split within a family can affect the value. HMRC has a specialist valuation team that may challenge the figures, so a properly reasoned valuation is important.