Over the last 18 months estate planning for business owning families has evolved more rapidly than at any point in the last decade. Whilst Inheritance Tax continues to dominate headlines, much of the real change has been driven not only by legislation but by shifting family dynamics, increasing asset values, and a renewed focus on governance and succession.
Across our offices in East Anglia the trend is clear: families are talking more openly about wealth, responsibility, and transition – and they are doing so earlier.
Whilst a lot of the focus has been on clients in the agricultural sector there are many structural trends we’re seeing among non‑farming business owners too.
Graham Doubtfire, Private Client Partner shares his insights on how changes to Inheritance Taxes have dramatically shaped conversations amongst family businesses.
The Inheritance Tax conversation has shifted – and families are engaging earlier
Inheritance Tax has been one of the most widely discussed areas of the UK tax system for the past 18 months. Rising asset values – particularly residential property and growing trading businesses – mean more estates are falling within scope, partly due to the nil rate bands being frozen which now extends to 6 April 2031.
Even without legislative reform, fiscal drag alone ensures Inheritance Tax remains a central consideration for many families.
However, what has changed is not just the tax position, but the conversation around it. Business owners are now:
- Discussing succession earlier, often in their 40s and 50s rather than waiting until retirement.
- Engaging multiple generations in planning, particularly where adult children are taking on operational roles.
- Focusing more on control and governance, not just the tax outcome.
- Considering long‑term family wealth planning, rather than one‑off tax‑saving exercises.
In short: families want sustainable structures, not short‑term fixes that focus on the Inheritance Tax burden being faced by the current generation.
A changing perspective on succession planning
Historically, succession was often triggered by a specific event – a sale, retirement, or health issue. Increasingly, families now approach succession as a continuous process, integrating it with business strategy.
And so, three common themes have emerged:
Preparing the Next Generation for Ownership
We’re seeing more structured involvement of the next generation – not just in operational roles but in governance, financial education, and shareholder responsibilities. Families recognise that inheriting wealth without preparation can create risk, conflict, or disengagement.
Using share structuring more creatively
Alphabet shares, growth shares, and freezer shares are increasingly used to:
- Manage the shift of value between generations.
- Retain control for founders while enabling future succession.
- Reduce the Inheritance Tax exposure of future growth.
Planning around a future sale
Many non‑farming business owners intend to sell their businesses or seek outside investment. Succession planning is now often aligned with preparing for that event – ensuring tax efficiency, shareholder alignment, and clarity on proceeds distribution.
Trusts back in favour but with a modern purpose
After a period where trusts were viewed with caution, they have firmly returned as a central part of family wealth planning. But the reason is not simply tax: it’s control, risk management, and protection.
Current uses of trusts include:
- Holding shares during a management transition.
- Ring‑fencing assets for vulnerable or financially inexperienced beneficiaries.
- Preserving family wealth where assets may otherwise be split through divorce or bankruptcy.
- Managing equalisation between children where only some work in the business.
Trusts are not a perfect solution and can create more modest tax charges every 10 years.
And with the Inheritance Tax changes from 6 April 2026, family trading businesses could face tax charges when the Trust is created. But for many families the 10-year charges are now simply viewed as a manageable cost of long‑term asset protection, especially compared to the alternative of transferring wealth outright.
The most significant shift, however, is cultural: families increasingly see trusts not as tax vehicles but as stewardship structures often separating the day-to-day management and rewards from the business from the long-term ownership.
Family Investment Companies (FICs): A more modern alternative
FICs continue to be one of the most flexible and tax‑efficient structures for long‑term family wealth planning, for several reasons:
- Corporation Tax treatment allows investment growth to accumulate at lower rates than personal taxation.
- Control can be separated from economic benefit, making them ideal for passing value to the next generation while retaining strategic oversight.
- Easily aligned with shareholders’ agreements, offering clarity around voting, distributions, and exit provisions.
There’s no Inheritance Tax charge on creation, unlike trusts above the nil‑rate band, although care is needed to avoid Capital Gains Tax when non-cash assets are introduced into the Family Investment Company.
Over the last 18 months, we have seen FICs used not just as investment vehicles but as wider family governance platforms, where a shareholder agreement or family charter codifies expectations, responsibilities and long‑term goals.
This is particularly attractive for families who:
- Own trading businesses but want a separate structure for wealth outside the company.
- Plan for a future sale and need a “landing place” for proceeds.
- Want to give children exposure to investment decisions within a controlled framework.
- Understand the roles and responsibilities in a Company Structure which are unfamiliar in a Trust as a comparison.
Practical trends among local business owners
Across the East of England, several patterns have become clear:
Earlier planning and more structured governance
Families are documenting decision‑making processes, introducing family councils, and agreeing formal policies on distributions, employment, and succession.
Increased use of combined strategies
Rather than choosing between Trusts, FICs or direct gifting, families are now blending these tools to achieve a number of outcomes including tax efficiency, control, asset protection and inter‑generational fairness.
With future tax reform remaining a possibility, business owners need to be stress‑testing their estate plans which should include revisiting their Wills and reviewing shareholder agreements and considering lifetime gifts and trust planning. The key is to focus less on predicting future policy and more on building structures flexible enough to adapt.
A more open family dialogue and a more mature long-term approach
Perhaps the single biggest shift: family members are increasingly discussing wealth, expectations and roles – conversations that even five years ago often felt uncomfortable. This openness is proving invaluable in preventing disputes and fostering long‑term alignment.
For all business owners, the last 18 months have marked a transition from reactive Inheritance Tax planning to proactive family wealth planning.
Trusts, FICs and structured succession tools are all playing a role, but the most significant changes are behavioural. Families are engaging earlier, they are talking more openly, and they’re looking beyond tax to build structures that support continuity, fairness and resilience.
As the legislative environment continues to evolve, the families who will benefit most are those treating succession not as an event, but as a multi‑generational journey.
We’re here to help
We often get asked “how do I do Inheritance Tax planning?”. You’ve probably heard the term, but knowing how to do it and where to start is a common stumbling block.
But as with any plan the best starting point is to document where you are now and what your Inheritance Tax liability would be based on current asset values.
We can then help you to understand how changes such as those above will alter your Inheritance Tax liability whilst providing long term stability and protecting assets from as yet unknown challenges.
For further information, get in contact with Graham or one of the team by calling 0330 058 6559 or email
hello@scruttonbland.co.uk
