Farmers and landowners are converging on Westminster today to protest about the proposed changes to Inheritance Tax, Agricultural and Business Property Relief.
It is clear that frustrations are running high and farmers want to make their voices heard with the benefit of some high-profile supporters. However, it’s going to be a tough battle to overturn government plans to limit the financial ‘protection’ that Agricultural Property Relief and Business Property Relief have given them over the last 40 years.
Whether the government makes any further changes to the key announcements it made in the Budget in light of this strong opposition, we will have to wait and see. We should know more once further technical details of the changes are published (promised for ‘early 2025’).
Whilst farmers have mobilised themselves quickly, other business owners have understandably been more focussed on the impact on their business of the changes to National Insurance, than their own Inheritance Tax position. But some of these changes will potentially have as large an impact on them, especially those who have been built up a healthy business and a sizeable pension pot.
Nearly three weeks on from the Budget, the question we would like to ask all business owners is have they sat down yet with an advisor and reviewed the impact on their own tax position and begun discussing the options available to them? Just as every business is different, so are the ambitions and goals of each business owner. The sooner the planning process begins, the better equipped they will be to adapt to any subsequent changes to the proposals.
We must acknowledge in our planning that government policies and focus will change every few years. It is critical that any succession plan is seen as organic with resilience and flexibility built in to it. It should be reviewed at least every five years and when there is a major event that could affect it, such as the recent Budget.
Business owners should now be reviewing their succession plans to see if they are still aligned with their goals and the tax landscape and if not, what the alternatives might be. If you haven’t yet thought about business succession, we covered this in detail earlier this year.
This is not something to put off for another five years because you are too young. Five years is a long time and delaying planning your future can make a significant difference to enabling you to meet your future financial goals.
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