Tax changes could lead to ‘fire sale’ of family SMEs, experts warn

cityam11-12

Businesses have predicted millions of pounds in extra costs from Budget tax increases Industry leaders have warned there will be an influx of for-sale signs on UK businesses as their owners and ...

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The concern comes following the announcement in Reeves’ Autumn Budget that business assets worth more than 1m would no longer be exempt from IHT – further affecting a large number of family businesses.Richard Stanley, partner at accountancy group UHY Hacker Young, believes there will be a large number of businesses sold by those who inherit them, “just to settle the big IHT bills.”This, Stanley said, could be met with reduced demand or an unfavourable market as a whole.He added: “Typically, family business owners retain 90 per cent of their wealth in the business so few people will have the means to fund a 20 per cent Inheritance Tax bill. “So, either the business covers the cost through a dividend payment or assets, or the entire","collect":0,"end_time":0,"defaultTopTitle":"cityam.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU1989772923.USD":"CPR Invest - Climate Action A2 Acc USD-H","LU1162221912.USD":"FRANKLIN INCOME \"A\" (USD) ACC","LU0267386448.USD":"FIDELITY FIRST ALL COUNTRY WORLD \"A\" (USD) INC","LU0098860793.USD":"FRANKLIN INCOME \"A\" INC","BK4588":"碎股","LU0320765646.SGD":"FTIF - Franklin Income A MDIS SGD-H1","BK4181":"酒店及度假村房地产投资信托","LU1363072403.SGD":"Fidelity Global Financial Services A-ACC-SGD","IE00BZ1G4Q59.USD":"LEGG MASON CLEARBRIDGE US EQUITY SUSTAINABILITY LEADER \"A\"(USD) INC (A)","LU0106831901.USD":"贝莱德世界金融基金A2","LU0314104364.USD":"MANULIFE GF AMERICAN GROWTH \"AA\" (USD) INC","LU0006306889.USD":"SCHRODER ISF US LARGE CAP \"A\" (USD) INC AV","LU0106261372.USD":"SCHRODER ISF US LARGE CAP \"A\" ACC","BK4581":"高盛持仓","LU1720051017.SGD":"Allianz Global Artificial Intelligence AT Acc H2-SGD","LU0225283273.USD":"SCHRODER ISF GLOBAL EQUITY ALPHA \"A\" (USD) ACC","BK4504":"桥水持仓","LU0971096721.USD":"富达环球金融服务 A","LU1548497426.USD":"安联环球人工智能AT Acc","LU1074936037.SGD":"JPMorgan Funds - US Value A (acc) SGD","BK4218":"酒店及度假村房地产信托","IE00BKVL7J92.USD":"Legg Mason ClearBridge - US Equity Sustainability Leaders A Acc USD","BK4127":"投资银行业与经纪业","LU1668664300.SGD":"Blackrock World Financials A2 SGD-H","IHT":"InnSuites Hospitality Trust","BK4516":"特朗普概念","LU1720051108.HKD":"ALLIANZ GLOBAL ARTIFICIAL INTELLIGENCE \"AT\" (HKD) ACC","LU2357305700.SGD":"Allianz Global Artificial Intelligence ET H2-SGD","BK4585":"ETF&股票定投概念","BK4534":"瑞士信贷持仓","LU1989772840.SGD":"CPR Invest - Climate Action A2 Acc SGD-H"},"translate_title":"专家警告称，税收变化可能导致家族中小企业“甩卖”","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"IHT":1},"content_text":"Businesses have predicted millions of pounds in extra costs from Budget tax increases Industry leaders have warned there will be an influx of for-sale signs on UK businesses as their owners and subsequent heirs begin to cope with a change in inheritance tax (IHT). The concern comes following the announcement in Reeves’ Autumn Budget that business assets worth more than £1m would no longer be exempt from IHT – further affecting a large number of family businesses.Richard Stanley, partner at accountancy group UHY Hacker Young, believes there will be a large number of businesses sold by those who inherit them, “just to settle the big IHT bills.”This, Stanley said, could be met with reduced demand or an unfavourable market as a whole.\n\n“Is there a market for all those SMEs? We could well see them being sold off at ‘fire sale’ prices. That would mean years of built-up value simply going to waste,” Stanley said. Currently, Britain’s SMEs account for over 99 per cent of the country’s business population, a growing total of 5.5m. From April 2026, a tax of 20 per cent would be raised on the value of inherited property assets above £1m under the plans.While this still represents a tax relief of 50 per cent compared to the standard rate, it has been criticised by those who fear it will cause troublesome succession planning. \n\nStanley said IHT on business assets will also cause business owners to extract cash from their firms in order to make it a “gift to their heirs” — gifts are exempt from IHT after seven years — which will in turn lead to less money for investment and growth. “In some cases that could reach the point of the businesses being ‘asset-stripped’ as their owners get older,” Stanley added.Neil Davy, chief executive of Family Business UK, is one of many advocating for a reversal of what he coined a “damaging policy.” “Inheritance Tax is widely seen as a tax on individuals. But the truth is that when it’s applied to those owning and running family businesses, it is a direct cost to the company,” Davy said. \n\nHe added: “Typically, family business owners retain 90 per cent of their wealth in the business so few people will have the means to fund a 20 per cent Inheritance Tax bill. “So, either the business covers the cost through a dividend payment or assets, or the entire business, will be sold to cover the cost.”","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2483770025"}