The passing of the April tax year deadline marks the end of what has been an exceptionally busy period in the world of private client. The last two years have seen significant upheaval to the personal tax landscape and considerable uncertainty for advisers and clients with shifting goalposts and long-awaited detailed guidance to provide clarity on how new provisions will apply.

Despite no new major changes on the horizon, we don’t expect the demand for private client tax advice to slow down. However, we do expect that the character of that need may change and evolve. A more settled tax landscape gives individuals time to reflect and consider more long-term tax planning.

For those impacted by the changes to Agricultural Property Relief (APR) and Business Property Relief (BPR), it will be too late after April to take action ahead of the inheritance tax (IHT) changes, but there is still much that those affected may wish to consider. And after a slower period for transactions, we may also see an uptick in business exits, meaning shareholders will need to consider the many personal tax considerations of a possible sale.

Succession planning for private business owners

Once the dust has settled on the inheritance tax changes, private business owners may want to take time to reflect on the long-term future plan for their business. Do they expect to pass the business on to family (and is there family willing and able to take it on) or might they ultimately be looking for an exit? Whatever the answer to that question, there are steps which can be taken to improve the tax outcome.

Tax planning to ‘pass the baton’ effectively

For business owners who want to plan for succession, BPR remains a valuable relief – even after the changes being introduced in April 2026. Further announcements towards the end of 2025 have resulted in the individual allowance for 100% BPR relief being increased to £2.5m with the potential to pass this relief on to a surviving spouse or civil partner (giving a possible £5m 100% allowance for a couple). Even for businesses worth more than this, the 50% relief remains a significant deduction and the BPR position of private companies should be kept under review.

Passing on ownership during lifetime is an effective way to mitigate tax exposure. However, the timing of such gifts will need careful consideration both in terms of tax impact and the transfer of possible control to the next generation. Where possible successors are young, or asset protection is a consideration, private business owners may wish to consider using a trust. A trust also offers flexibility where it is not yet clear which family member might take over the running of the business, or whether an exit might still be considered – since any proceeds can be used to benefit family members.

There is potential for an IHT tax charge when creating a trust, but there remain options for those planning early and looking to give away future value. Capital gains tax (CGT) will also always remain a consideration when disposing of assets, even by way of gift, although holdover relief might be available to defer any such tax charge.

Getting a business sale-ready

For those business owners who ultimately expect to exit via sale, early planning ahead of going to market can improve tax outcomes and ensure that, where appropriate, proceeds of sale are passed down the generations. A ‘readiness’ review can help here – assisting businesses to make early preparations at both a corporate and personal level to improve both the tax and commercial position ahead of any sale.

At a corporate level, consider whether the existing structure is right for a future exit – for example, are there assets (eg property) that the owner is likely to want to retain that may need to be taken out of the business ahead of any sale; is there borrowing/lending in the business that might need to be repaid or refinanced. Business owners may also want to consider incentivising management teams with the likes of tax efficient share options, transaction bonuses and other plans to help retain talent during the sale and protect the business.

From a personal perspective, shareholders may want to consider whether the ownership structure suits their long-term aims. For example, do they want to pass shares on to family members ahead of any sale; might a family investment company (FIC) be an attractive structure to manage investment and provide future income after a sale.

For those who feel a FIC might be appropriate, there may be planning which can be undertaken ahead of a sale to achieve this tax efficiently. Similarly, for those with young family members or those with asset protection concerns a trust might be an appropriate structure. As mentioned above, early planning may reduce the initial inheritance tax cost of putting assets into trust.

Shareholders will also want to consider the availability of CGT reliefs – particularly Business Asset Disposal Relief. Planning early can be important to ensure shareholders and family members meet the qualifying conditions for reliefs (particularly with regard to control). Recent changes to HMRC clearance procedures around transactions make it even more important to consider these matters early, since last minute planning to maximise access to reliefs may now be subject to anti-avoidance provisions.

Further uncertainty on the horizon?

Although there were no major changes announced in Budget 2025 (outside the significant concessions on APR and BPR), the outlook for personal tax is still not entirely without uncertainty.

At the Budget in November, the Government launched a call for evidence around ‘Tax support for entrepreneurs’. This is described by the Government as “making sure the tax system can help to unlock the UK’s scale-up potential” and is looking for evidence around how the existing tax system supports enterprise as well as any gaps in support and considers a number of existing tax reliefs, including (but not limited to) Enterprise Investment Scheme, and Business Asset Disposal Relief. While the aim is clearly to provide better support to business, this may lead to retargeting of that support with possible changes to, or even replacement of, some of the existing incentives.

Also in the Budget, the Government announced their intention to consult on Holdover Relief with an aim of modernising and expanding that relief so that it will apply to intangible property.

Finally, changes to the inheritance tax treatment of pensions announced at Budget 2024 are due to come into effect in April 2027, with some technical changes to these rules being included in the Finance Bill currently going through Parliament.

On top of these tax changes there is also the uncertainty caused by global events, which, while having no immediate tax impact, may well have an impact on the economy, with a knock on impact on the level and kinds of business sales.

Making the most of the current outlook

With fewer changes in the tax landscape, the horizon is calmer in the private client world – at least from a tax perspective. There are some possible remaining areas of uncertainty, but the general sentiment is much steadier. That being said, we must never confuse calm with quiet. With greater clarity, private clients are in a better position to make decisions for their future. No one should miss this opportunity to plan ahead with confidence.

If you would like to discuss long-term tax planning for your business, please contact Helen Relf or your usual RSM contact.

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