Family Business United Urges APR & BPR Tax Reform Review

Family Business United (FBU) is calling on the UK Government to urgently rethink proposed changes to inheritance tax reliefs that risk undermining the stability, continuity and growth of family-owned firms across the country.

Ahead of the upcoming Budget on 26 November, FBU is reiterating industry-wide concerns over key measures in the Finance Bill 2025–2026, specifically proposed reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR).

FBU warns that these proposals will have a disproportionate and detrimental impact on family businesses and older family business owners who have long planned in line with previous government policy.

“The proposed reforms create uncertainty at a time when family firms need clarity and stability,” said Paul Andrews, Founder and CEO of Family Business United.

“Younger owners may be able to take out insurance or plan ahead, but many elderly farmers and long-standing business owners simply do not have that option. They now face unexpected and potentially devastating tax bills which threaten the future of their businesses.”

These changes also come at a time when all businesses are faced with increasing costs associated with National Insurance, the Living Wage, Business Rates, supply chain increases and the effects of energy price increases which are already putting a strain on firms.

Under the current government proposals, set to take effect from April 2026, family businesses and farms would only receive full inheritance tax relief on their first £1 million of qualifying assets. Assets above this threshold would face a 20% tax charge, despite previously being exempt. Unlike other inheritance tax allowances, this relief cannot be transferred between spouses, a change that FBU believes unfairly penalises many long-established family enterprises.

For decades, elderly farmers and business owners have been encouraged by government policy to transfer assets on death, often avoiding both Capital Gains Tax (CGT) and Inheritance Tax (IHT). The sudden policy shift leaves many with no viable path to mitigate the impact, particularly those who are unwell, elderly, or unlikely to survive the seven-year period required for lifetime gifting reliefs.

Family businesses make up the backbone of the UK economy, producing goods, services and employment opportunities throughout the UK, as many have done for generations. Yet the uncertainty created by the proposed reforms is already affecting business confidence.

“We are hearing from firms across the UK that investment is being paused, recruitment is on hold, and long-term planning, the very foundation of family business success, is being derailed, some of it permanently,” Paul added.

"These measures are not decisions that families in business taker lightly but they are having to find solutions to pay for the potential tax liabilities that may arise and provide for them accordingly. With no business sale or other liquidity event for many this provision will have to come from the business and for some may result in some, or all, of the business to be sold."

FBU is urging the Government to engage meaningfully with the family business sector and reconsider the current approach to inheritance tax reform.

The organisation is calling for proper consultation to ensure that any future policy continues to support long-term, responsible family ownership. As Paul concludes:

“Family businesses think in generations, not quarters. They deserve policies that reflect their commitment to the UK economy and the communities they serve."

"We urge the Government to consult, listen and find a sensible approach that protects the continuity of family firms and helps to fulfil the growth agenda for the nation.”