Berry Bros chair warns inheritance tax changes threaten family firms
Berry Bros. & Rudd chair Lizzy Rudd has warned that changes to UK inheritance tax risk undermining the long-term stability of family-owned businesses. New research commissioned by Family Business UK suggests most firms still expect to be affected despite recent amendments to the policy.
Lizzy Rudd, chair of Berry Bros. & Rudd, has warned that forthcoming changes to UK inheritance tax could jeopardise the long-term future of family-owned companies, including those in the drinks sector.
Speaking as part of new research commissioned by Family Business UK, Rudd said the reforms present a direct challenge to businesses built to pass from one generation to the next.
“As a 327-year-old family business, we have always strived to be stewards for future generations,” she said. “As a B Corp, we also place great value on employing people, considering the wider community and the environment in all that we do. How are we expected to continue to build value for the long term when our children will one day have to pay inheritance tax on this value – a value which is on paper and not in our pockets unless business assets or the business itself is sold?”
She added, “Changes to inheritance tax are a very real threat to the future success of the business. In addition to the higher costs of operating right now, these changes are an additional burden for family businesses at the very time the Government should be encouraging us to invest. This tax will drive behaviour that I don’t believe the Government really want, neither does it really understand the principles on which we operate.”
Majority of firms still expect to be affected
According to research commissioned by Family Business UK, 57% of family businesses say they will still be affected by changes to inheritance tax. The survey polled 559 owners and senior decision makers in family businesses across the UK and across multiple sectors.
Only one in ten respondents said they expect no impact from the reforms.
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The findings relate to changes to Business Property Relief and Agricultural Property Relief, which determine how family businesses are treated under inheritance tax rules. Amendments announced shortly before Christmas increased the level at which inheritance tax becomes payable from £1 million to £2.5 million. Married couples can also transfer unused allowances, taking the combined threshold to £5 million.
Two-fifths of those surveyed, representing 42%, describe the amendments as positive, while 31% say they will make no difference to their business.
Smaller and mid-sized firms among the most exposed
The survey suggests the impact will be widely felt across company sizes and sectors. Among firms employing between 10 and 49 people, 55% say they will still be affected by the inheritance tax changes. This rises to 64% among businesses with 100 to 249 employees.
According to the research, manufacturing businesses report the highest level of expected impact at 64%. The IT and telecoms sector follows at 54%, with retail, catering and leisure at 52%.
Family Business UK chief executive Neil Davy said the policy is already influencing decision-making across the sector.
“Next month, for the first time in a generation, family business owners will have to pay inheritance tax based on the value of their business and business assets,” he said. “Since the change was first announced in October 2024, we have seen significant numbers of family businesses cut investment and jobs. Many owners have also told me that they are openly questioning the long-term future of their business. For a government committed to growing the economy, this can’t be the outcome it envisaged.”
“At a time when the UK desperately needs the economy to grow, this is the wrong policy at the wrong time. We are ready to work constructively with government to achieve a positive outcome that prevents further investment and jobs being lost.”
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