Only One In Four Family Businesses Will Remain Family-Owned In Ten Years

Ahead of the Budget on 28 October and amid widespread debate over recent changes to inheritance tax reliefs, new research from Russell-Cooke finds that less than a quarter of family business owners are confident their business will still be under family control in ten years’ time, while around one fifth believe that inheritance tax, or other estate planning issues, may result in the business no longer being family-owned.

A new survey of family business owners by law firm Russell-Cooke has revealed that less than a quarter are confident that their business will still be in the family in 10 years’ time.

Just published, The Future of Family Business: Survival, succession and stewardship in modern Britain, reveals a growing confidence gap among UK family businesses as owners look to the future.

The report is based on a survey of more than 500 UK family business owners conducted in partnership with YouGov, alongside interviews with business owners, advisers and wealth specialists. The report finds that while family businesses remain resilient, survival is becoming increasingly planned, professionalised, and less automatic than in previous generations.

Key findings

• Nearly two-thirds (63%) of owners are very confident their business will remain family-owned over the next two years. However, this falls to 38% when looking five years ahead, while just 24% believe their business will still be family-owned years beyond the next decade.

• 71% of family business owners identify business costs as one of their biggest current concerns.

• 57% point to political and economic uncertainty, while 43% highlight taxation and 38% cite regulatory and compliance burdens.

• One in three believe that the absence of a suitable or willing successor could ultimately bring family ownership of the business to an end.

• Nearly 30% would consider selling if presented with the right acquisition offer.

• More than one in five would consider selling in response to recent inheritance tax changes.

• Only 45% are confident that future inheritance tax liabilities could be met without selling part or all of the business.

One of the clearest findings from the research is that family businesses do not face identical challenges. The research also highlights a growing divide between smaller and larger family businesses when it comes to succession planning, finding that larger firms are generally better prepared for long-term transitions, benefiting from more formal governance structures, clearer succession plans and less reliance on individual family members.

In contrast, smaller family businesses are more likely to depend on informal arrangements and personal relationships, leaving them potentially more exposed when leadership transitions arise.

James Cook, Partner at Russell-Cooke, notes that:

“Family businesses have always demonstrated remarkable resilience, and that remains true today. What our research brings into focus is the widening gap between owners’ confidence in the business itself and their confidence that it will remain under family ownership in the future.”

“The traditional assumption that ownership will naturally pass from one generation to the next can no longer be taken for granted. Owners are operating in an environment shaped by rising costs, economic uncertainty, changing tax rules and increasingly complex family dynamics. Against that backdrop, succession is becoming one of the defining challenges facing family businesses.”

“Successful succession is about far more than transferring wealth or shares. It requires families to prepare future leaders, align their family and business interests, and put structures in place that support informed and sometimes difficult decisions.”

“The forthcoming Budget will be watched closely by family business owners. At a time when many are already uncertain about whether their businesses can remain within the family, further tax uncertainty risks making long-term planning even more difficult. Whatever the fiscal environment, the findings of our research underline the importance of beginning succession conversations early and considering the full range of ownership, governance and tax implications to make the transition as smooth as possible.”

The report concludes that businesses most likely to thrive over the next decade are those planning early, developing future leaders, strengthening governance, and addressing potential succession challenges before they become disputes.

See a link to the full report on the website here.