Family companies across the UK are facing mounting pressure from inheritance tax reforms introduced by Chancellor Rachel Reeves in 2024, which limited relief on business property. Although a partial U-turn raised the threshold from £1 million to £2.5 million in April 2026, many family-owned firms argue the changes remain poorly designed and continue to campaign for full reversal ahead of the upcoming Budget. These businesses, which represent over 90% of UK private enterprises, employ nearly 60% of private sector workers and contribute more than £400 billion in taxes.
Critics warn that forcing firms to set aside cash for potential IHT liabilities hampers long-term investment and growth, potentially driving patient capital toward short-term private equity interests. An FBUK survey found nearly two-thirds of members with over 50 employees reported negative impacts from the reforms, despite a slight uptick in confidence since Q1. Examples include Woodmansterne Publications, whose managing director Seth Woodmansterne said he could not make recent warehouse and printing investments under current conditions.
The article notes historical parallels, such as Timpson’s 1929 stock market float to pay death duties, and underscores the long memories of family businesses, citing lessons from past relief measures like Denis Healey’s business property introduction 50 years ago.
Source: Financial Times Companies · Summarized by HeadlinesBriefing