What should business owners consider?

Why business owners have extra to think about

If you own a business, its future can affect your family, your staff and your business partners. Without planning, the business might struggle if you become unwell or die. Estate planning for business owners usually covers continuity, ownership and tax. For an overview of the wider picture, see what estate planning covers.

Who will run the business?

Think about what would happen if you could not work, either for a while or permanently:

• Who would sign contracts, pay staff and deal with customers?
• Does anyone else have access to bank accounts and passwords?
• Do your partners or co-directors know your wishes?

Lasting Powers of Attorney

A personal property and financial affairs LPA lets attorneys manage your finances if you lose capacity. Some business owners consider whether their attorneys are the right people to deal with business matters too, and some look at separate arrangements. Company articles and partnership agreements may also affect what an attorney can do. Read about the types of LPA.

Who will inherit the business?

Your Will can leave business assets or shares. But other documents may also apply:

• Company articles of association may limit who can hold shares.
• Shareholder or partnership agreements may give other owners the right, or duty, to buy your shares.
• Insurance policies may be in place to fund a buy-out.

These documents need to fit with your Will. If they conflict, your family may face delays or disputes.

Inheritance Tax: business and agricultural relief

Business Relief can reduce the value of a business or its assets for Inheritance Tax. GOV.UK says it can be either 100% or 50%, depending on the assets. Agricultural Relief works in a similar way for qualifying agricultural property.

Changes from 6 April 2026

According to GOV.UK, at the time of writing (October 2026):

• 100% relief is limited to the first £2.5 million of combined qualifying business and agricultural property for each individual
• qualifying property above that receives 50% relief
• any unused part of the £2.5 million allowance can be transferred to a surviving spouse or civil partner
• shares not listed on a recognised stock exchange, such as AIM shares, receive 50% relief rather than 100%
• IHT on qualifying property can be paid by interest-free instalments over 10 years

Special rules can apply to trusts holding business or agricultural property. A professional can explain how these may apply.

Other Inheritance Tax points

The main nil-rate band, residence nil-rate band and seven-year gift rules also apply. From 6 April 2027, most unused pension funds and death benefits are due to come into the scope of IHT, which may matter if your business has funded a pension for you. See our guide to Inheritance Tax.

A practical example

Priya and her brother each own half of a family engineering company. Their shareholder agreement says nothing about death. Priya’s Will leaves everything to her husband, who has no involvement in the business. Her brother worries about running the company with a new co-owner. They ask a solicitor and accountant to review the agreement, their Wills and how relief may apply, so that the documents work together.

Sole traders and partnerships

If you are a sole trader, the business is not separate from you. It ends on your death unless someone continues it, and assets pass under your Will. Partnerships depend heavily on the partnership agreement, which may say what happens when a partner dies or loses capacity.

Practical steps to consider

• Keep a clear record of what you own, including shares and property used by the business.
• Check your company or partnership documents.
• Make sure key people can access important information.
• Review your Will and LPAs alongside business arrangements.
• Review plans after major changes, such as new investors or a sale.

Scotland and Northern Ireland

Inheritance Tax rules apply UK-wide, but succession and power of attorney rules differ in Scotland and Northern Ireland.

When to get professional help

Business succession often needs a team: a solicitor for Wills and company documents, an accountant or chartered tax adviser for tax, and sometimes a regulated financial adviser. It is usually wise to take advice if your business may be worth over the relief allowance, you own a farm, you have co-owners, or you are planning a sale or handover. This article explains general concepts and is not tax advice.

Next steps

If you would like to discuss your situation with a qualified professional, you can read about our estate planning introductions or start the estate planning questionnaire. WillHarbour is an introduction service, not a law firm, and does not give legal, tax or financial advice. With your permission, we share your enquiry with up to three suitable firms that offer estate-planning services. They will explain their fees and their referral arrangement with us before you decide to go ahead.