You should consider employing a facilitator to help you frame the discussions – this could be a trusted existing adviser or someone completely new. In either event, being open about the possibilities tends to stand families and their boards in good stead. 6. Think about your pension As the prospect of the new IHT charge looms, many of you will also be concerned about your pension funds. Along with your homes, these are likely to be one of the more significant non-business assets available to pass on to your family. From 6 April 2027 these will be liable to IHT. Keep in touch with your financial advisers as details become clearer - likely in the second half of 2026. Being better informed about how the overall picture will look is the first and most important step to carrying out succession planning across the whole of your estate. This is only a brief overview of key points to be thinking about both now and beyond the changes coming in April this year. As always, do take professional advice before undertaking planning but, above all, keep your lines of communication open both among the family and across the business.
Don’t forget that an LPA cannot manage the loss of capacity of a
director of a company. Review your articles or shareholders agreement to see what happens if one of your directors loses capacity, which could just as easily be due to an unforeseen incident as a degenerative age-related condition. Planning for this scenario is a critical part of your business continuity. 4. Talk to the business In the months since the October 2024 Budget we have seen an increase in boards of family businesses asking what the tax changes mean for the directors or other senior stakeholders. Succession to the business ownership is inextricably connected to those conversations. From the need to fund a new IHT charge via a special dividend to the terms of a new family trust or Will, the inclusion of spouses as potential shareholders or beneficiaries of trusts or the need for better communication with shareholders, these conversations are critically important to the future of the businesses. This does not mean “washing the family laundry” in public, but with thought and a sensible degree of openness can be hugely beneficial. 5. Take regular advice If your family wishes to change direction and perhaps accelerate succession or even change the business ownership structure, then talking to your board or senior management at the right time is important.
Sonal Shah Farrer & Co LLP
www.familybusinessuk.org 21
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