Inheritance tax reform: Will Europe follow the UK’s lead or learn from the risks?
Jesus Casado Secretary General EFB
keeping productive businesses in the hands of families across generations. We need to ask: have governments forgotten why these reliefs were created in the first place? We need to be clear: productive business assets – land, equipment, capital – are not windfalls. They are how family firms generate employment, invest locally, and sustain economic activity over the long term. Taxing those assets at the point of transfer just because ownership is changing hands within a We have seen where this leads: l In France , one of the EU’s most aggressive inheritance tax regimes has driven many family firms into foreign hands. The Pacte Dutreil , a crucial relief scheme, is now under family is not just unfair, it is economically self-defeating.
threat. The result is greater uncertainty, fewer family-owned enterprises, and a slow bleed of local economic control. l Belgium’s proposed expansion of the Exit Tax punishes businesses that relocate, often because the cost of staying has become unsustainable. l In Finland , public debate is shifting. Many now support capital gains tax on inherited assets instead of traditional inheritance tax. They’re asking the right questions: Are we taxing success? Are we killing the golden goose? The policy failure at the heart of this trend is a fundamental misunder- standing of what business succession is. It is not the transfer of idle wealth. It is the handover of responsibility – for jobs, for communities and for economic stewardship.
Across Europe, inheritance tax is back on the political table. Budget deficits, the aftermath of COVID-19 and surging energy costs have placed governments under pressure to find revenue fast. One tempting target?
Longstanding tax reliefs for family-owned businesses.
In the UK, changes to Business Property Relief and Agricultural Property Relief have rung alarm bells. They mark a major shift in how we treat succession and entrepreneurship. European Family Businesses (EFB) have noticed this shift in other countries, as they are beginning to ask the same questions. Across the continent, policymakers appear to be drifting away from the spirit of the 1994 EU Commission Recommendation on Business Transfers – a document that recognised the economic value of
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