Forward thinking legislation goes into reverse
Steve Rigby Co-CEO, Rigby Group Board Director, FBUK
decision not taken lightly and which came with a fear of loss of control and purpose for the founding generation. If we had certainty about the existence of BPR continuing unchanged we might have delayed things, but it now feels like it was a very wise thing to do. If it is fear of loss of control over your legacy that is stopping you considering the transfer to trust, I would reassure you by saying that these issues can be dealt with by trustees working to a clear letter of wishes. For instance, you can stipulate that the primary business asset cannot be sold or broken apart. With taxation rates for PAYE and dividend tax after corporation tax now all looking very similar, the argument of dividends being more beneficial no longer carries weight and therefore with a combination of salary payments and transference to trust, the risks can be managed. These are issues that frankly none of us will relish having to deal with. Working your entire life to build a legacy and leave your children with a thriving and prosperous business is a privilege, but also adding greatly to the nation’s economy, culture, capability and skills. FBUK will continue to make these points and to make our voice heard with the aim of reversing or amending this vital legislation.
It is somewhat ironic that it was Labour who introduced Business Property Relief (BPR) back in 1976 as a forward -thinking piece of legislation. For five decades we have been able to rely on BPR to make long term growth plans for our family businesses, avoiding complex tax and restructuring planning. Unfortunately, on 30th October 2024 that all changed. Despite valiant efforts by Family Business UK to avert this outcome, with a letter to the Chancellor signed by 70 of our biggest members, meetings with Treasury, national press advertising and dozens of media articles, our very worst fear materialised and business assets will now be captured by inheritance tax relief. It’s no understatement to say that alongside changes to Agricultural Relief our regional and rural economy is set to be scarred for years to come, putting jobs and communities at risk. The new legislation will come into force on 6thth April 2026 giving us a short window to lobby for an amendment and ideally its removal. The role of FBUK has become more important than ever. You can help create momentum by supporting us and also contacting your own MP. Given where we are, I would urge any company that has not undertaken family structuring to consider their future ownership structures immediately. Instead of considering growth, unfortunately all energy now needs to be inward focused to consider how to best protect the longevity of the family business whilst providing for the current generation. The priority must be considering the future of your enterprise, having discussions with the next generation about their intentions and planning for optionality. In Rigby Group, one the UK’s largest family businesses, these discussions concluded earlier this year with the final transfer to trust from the first generation. It was a
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