Chancellor of the Exchequer Rachel Reeves has today announced a small concession for family businesses regarding proposed reforms to inheritance tax relief.
Under proposals first announced at the 2024 Budget, the Government will reform Agricultural Property Relief (APR) and Business Property Relief (BPR), so that full 100% relief will be limited to a £1 million.
During today’s Budget, Ms Reeves confirmed that family business owners would be able to transfer their £1 million allowance between spouses, raising the allowance to £2 million for some.
Family Business UK will continue to press government for a more meaningful change to the policy.
Responding to the announcement in today’s Budget, Neil Davy, Chief Executive Officer at Family Business UK said:
“The Chancellor’s announcement allowing family business owners to transfer their £1 million allowance between spouses is a welcome step and one of the proposals we asked the Government to consider.
“But it represents a minor tweak to a policy that is doing enormous damage to private and family-owned businesses and farms.
“The changes to BPR and APR have led business owners to cut investment and stop hiring. Regardless of today’s concession, family businesses and farms are subject to a tax that no other model of business ownership has to pay.
“Today’s announcement is recognition that the Government got this policy wrong last year. Minor tweaks do not make it right.
“The right thing for government is to pause this policy and work with us to find a better solution than this damaging tax.”