Policy Recommendations
Family Business UK is clear that the Government should seek to retain BPR and GHR. The two reliefs work and achieve the long-standing policy objective that families should not be financially penalised when looking to pass down successful businesses to the next generation. Changes to the two reliefs would significantly impact the ability of family businesses to operate, risking businesses breaking up, offshoring, or closing operations. Nevertheless, it is often the case that ‘tough decisions’ need to be made when faced with constrained public finances. Family Business UK is confident that the UK’s family businesses use both BPR and GHR for the purpose they were established to achieve – the effective passing down of successful businesses to family members – but is aware of debates about whether they are misused - and would welcome opportunities to reinforce the importance of retaining the reliefs for their original purpose. The Government could also consider a ‘clawback’ option for the reliefs, making the reliefs conditional on the continued ownership of the business or its assets for a defined period This would bring the UK’s policy in line with other leading nations, including the United States and Germany. Introducing a ‘clawback’ option for the reliefs would ultimately reinforce the point that the UK’s family businesses care about longevity and want to continue building their family businesses and contributing to UK plc. Summary Building a family business is not easy. It can take many decades, and several generations for family businesses to establish themselves as market leaders.
The key to unlocking this challenge is a supportive policy landscape with Business Property Relief and Gift Holdover Relief at its core.
Any moves to reform or to scrap these reliefs would undermine the passion and dedication of family businesses across the country, irrevocably damaging their ability to create meaningful companies that put people and communities first. Such a move runs contrary the need for stability to drive long term economic growth.
Furthermore, it would act as a significant disincentive for family businesses, and those leading them, to locate either the company, themselves, or both, in the UK. Examples, in this paper, clearly highlight the effects of such a move.
Family Business UK will continue to engage governments and policymakers to ensure family businesses are positioned to prosper and flourish, through retention of BPR and GHR.
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