Family succession planning – Autumn Budget 2026

The 2026 Budget may not have delivered a headline-grabbing overhaul of inheritance tax or wealth transfer rules, but it contains a number of measures which will have a significant impact on business owners, entrepreneurs and wealthy families planning for the transfer of assets between generations.

The Budget Statement confirms that succession planning remains firmly on the government’s agenda, albeit through targeted reforms rather than wholesale change.

One of the most significant announcements for family-owned businesses is the government’s decision to modernise the taxation of company distributions. The Budget notes that the reforms are intended to ensure that similar transactions are taxed consistently while preventing opportunities for taxpayers to obtain more favourable treatment through technical structuring.
Importantly, the government explicitly states that these reforms are designed to preserve Capital Gains Tax treatment for genuine changes in ownership, including “families passing down their business”. It further confirms that draft legislation will be consulted upon before implementation in April 2028.

However, not all the changes are favourable. The Budget confirms that the lifetime limit for Business Asset Disposal Relief (BADR) will reduce from £1 million to £500,000 from April 2027.

The Budget also seeks to encourage entrepreneurship and long-term business growth through the introduction of a new Founders’ Relief. This reflects the government’s desire to promote the creation and scaling of UK businesses and may create additional opportunities for entrepreneurial families considering future succession and exit strategies.

Overall, Budget 2026 reinforces a clear policy direction. The government wishes to support genuine family business succession and entrepreneurship while tightening areas where tax outcomes are perceived to be inconsistent or overly generous. As a result, business owners and wealthy families should not view the absence of major Inheritance Tax reform as a reason for delay. Instead, now is an opportune time to review shareholder arrangements, succession plans, trusts, Wills and intergenerational wealth transfer strategies to ensure they remain fit for purpose in an evolving tax landscape.