According to Bloomberg, effective April 6, the effective rate could be as high as about 20%, whereas before, many heirs actually avoided paying out because of the benefits.
Previously, family business owners often retained assets until the end of their lives. This allowed the business to be passed on to heirs almost tax-free. Now such a strategy loses its meaning: in a similar scenario, the heir will have to pay a significant share of the value of the assets to the state.
Businesses are hastily rewriting assets
At the same time, it is still possible to completely avoid tax if you transfer assets during your lifetime and live after that for at least seven years. In this case, the property is not taxed. However, this mechanism is not suitable for everyone: elderly business owners are forced to hastily rewrite assets to heirs, assuming the risk of not living until the expiration of this period.
According to Bloomberg, about half of British billionaires from the list of 500 richest people in the world are over 70 years old, which makes the issue particularly relevant for this group.
Finding workarounds
Family-owned companies are trying to reduce their tax burden in a variety of ways. Among them are increasing dividend payments and writing insurance products. In some cases, businesses have to sell assets or take out loans to cover future tax liabilities.
Another common tool is transferring assets to trusts or corporate structures. While these assets are also taxed (e.g., every 10 years), the rate is usually lower. This allows the payments to be spread out over time and reduces the burden.
Farmer protests and concessions by the authorities
The inheritance reform was a continuation of decisions made in 2024 by Chancellor of the Exchequer Rachel Reeves, when key tax breaks were abolished. This caused a sharp reaction in British society. Many billionaires left the country in search of a better place to store their assets.
However, for most family businesses, and especially landed aristocrats and farmers, this option was not possible – they resorted to their own methods. At the end of 2025, British farmers on tractors drove into central London and protested in the government quarter. After that, the authorities made concessions and raised the threshold for tax-free inheritance for business and agricultural property from £1 million to £2.5 million.
Nevertheless, the tax will be an important part of the UK budget. The government estimates that the changes to the taxation of business and agricultural assets will generate around £300 million annually.
