2. UNDERSTANDING THE EFFECTS OF IHT REFORM ON UK FAMILY-OWNED BUSINESSES AND FARMS In the immediate aftermath of the Autumn Budget 2024, CBI Economics surveyed 234 family businesses to gauge reactions to the announced changes to BPR. In February 2025, CBI Economics conducted a larger-scale, comprehensive survey to capture the effects of both BPR and APR changes, receiving 4,147 responses from family businesses and farms. Questions focused on the economic and fiscal impacts of the announcement, aiming to address the OBR’s evidence gap around behavioural responses and consequences for UK family businesses. This survey considered not just the expected changes once the reforms are enforced from 2026, but also the business response and mitigating actions ahead of the policy change coming into force in April 2026.
Key findings include:
• Widespread investment cuts: across both BPR and APR, more than 60% of businesses anticipate reducing investment by more than 20%, with average investment declines of 15.8% (APR) and 15.5% (BPR). • Businesses have already reduced investment and employment: around half have paused investments and up to 23% have reduced headcount due to BPR and APR changes.
• Business restructuring is a growing concern: around 1 in 5 are considering downsizing under both BPR and APR, with up to 12% contemplating a sale.
• Accelerated gifting: in response to anticipated changes, 39% (APR) and 46% (BPR) plan to gift shares or assets to family members before April 2026. In doing so they may be unaware of anti-forestalling measures designed to offset this. • The North and devolved nations are expected to bear the brunt of the changes: the North East, Northern Ireland and Wales forecast the steepest declines in investment, turnover, and employment.
• Anecdotal evidence confirms broad impact: open-ended responses reveal growing concerns over business succession, community involvement, and long-term viability.
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