A significant shift is underway in the UK's family business landscape, driven by proposed changes to inheritance tax (IHT) rules. New research reveals that a quarter of business owners are now planning to transfer their companies to their children within the next five years, a move directly motivated by the desire to mitigate a potential future tax raid on family firms.
The Rush to Transfer Wealth
According to a survey by the accountancy group Moore UK, 25 per cent of entrepreneurs intend to hand their business over to the next generation within half a decade. The study, conducted in January 2026, found that 19 per cent are specifically looking to pass on their firms before they die to reduce a future tax bill from HMRC.
This marks a dramatic departure from traditional succession planning. Mark Lance, chief executive of Moore UK, explained: "Traditionally, business owners would pass on wealth once they died. However, due to a change in policy introduced by the government, they are now seriously considering transferring that wealth within the next five years."
Potential Pitfalls of Hasty Succession
Despite the clear tax incentives, experts are sounding a note of caution. Lance warned that this hurried approach could seriously "backfire" if businesses are passed to children who are not yet equipped or ready to run them effectively.
"There is a serious risk that business owners are being forced into these transfers by the changes to IHT to the potential detriment on those businesses," Lance stated. He emphasised the clear disadvantages of having experienced owners "suddenly step away from the management."
The survey data highlights a complex picture of wealth transfer intentions across the UK:
- 12 per cent of respondents said they are not affected by the IHT issue.
- 22 per cent plan to pass on savings, property, and investments in the next five years.
- 21 per cent will wait to see if the current or next government alters IHT rules.
- 15 per cent do not intend to pass on anything during their lifetime.
Taxation: The Dominant Concern for Business
The research underscores that taxation remains the foremost worry for UK business owners. An overwhelming 40 per cent of respondents cited it as the single greatest challenge facing their enterprise as they look towards 2026.
The urgency to transfer is most pronounced among larger businesses. The survey found that 23 per cent of owners with revenues between £5 million and £10 million intend to transfer all or part of their wealth soon, making them the most likely group to act. In contrast, those with incomes of £2.5 million to £5 million were the least likely, with only 13 per cent planning a company transfer.
Other concerns are also influencing decisions. A small but notable 2 per cent said they would not pass wealth on due to fears it could be lost, citing reasons such as divorce. Meanwhile, 9 per cent stated they will not transfer assets until the next generation has first created its own business.
