When the Business Is the Legacy: Succession Planning for Business Owners and Farmers

For many business owners and farmers, work and family life have been closely linked for years. The business may provide an income, employ relatives and represent something that has taken a lifetime—or several generations—to build.

That is why succession planning is about much more than deciding who receives an asset in a will. It is about making sure the right people can take control, the business can continue and those left behind are not forced to make difficult decisions at the worst possible time.

Without a clear plan, even a successful business can quickly become vulnerable. Bank accounts may be difficult to access, important decisions can be delayed and disagreements may arise over who was expected to take over.

A successor is not always the same as a beneficiary

One of the first questions is whether the person who inherits the business should also be the person who runs it.

In some families, the answer is straightforward. A son, daughter or other relative may already be closely involved and keen to continue. In others, one child works in the business while their siblings have chosen completely different careers. Leaving everything equally may appear fair on paper, but it could leave the active child without enough control to make decisions.

Fairness does not always have to mean an identical share of every asset. It may be possible to leave the business to the person best placed to continue it while using other assets, insurance or carefully planned arrangements to provide for other family members.

The conversation can be particularly sensitive for farming families. The land, farmhouse, machinery, livestock and trading business may not all be owned in the same way. Some assets may be held personally, others through a partnership or company, and some land may be rented rather than owned.

Before deciding who should receive what, it is important to understand exactly what belongs to whom.

Make sure all the documents tell the same story

A will is central to succession planning, but it cannot work in isolation.

Partnership agreements, shareholders’ agreements, company articles, property ownership and insurance arrangements can all affect what happens when an owner dies. If these documents point in different directions, the outcome may not be the one the family expected.

For example, a will might leave company shares to a family member, while a shareholders’ agreement gives the remaining owners the right to buy those shares. A farm may be described as a family asset even though the land is legally owned by one individual and the operating business is a partnership.

The people chosen as executors also matter. They do not need to run the business personally, but they should be capable of dealing with its value and complexity and know where to find the professional support they need.

There should also be a plan for incapacity. A will only takes effect after death. If an owner becomes seriously ill or loses mental capacity, a suitable Lasting Power of Attorney may allow trusted people to deal with relevant financial and business matters. The authority given needs to fit alongside the business structure and existing agreements.

Do not assume tax relief will solve everything

Agricultural Relief and Business Relief can reduce the Inheritance Tax charged on qualifying assets, but the rules are detailed and not every business, building or piece of land will qualify.

Since 6 April 2026, the combined value of qualifying agricultural and business property that can receive 100% relief is generally limited to £2.5 million for an individual. An unused allowance may be transferable between spouses or civil partners, potentially increasing the combined allowance to £5 million. Qualifying value above the available allowance normally receives 50% relief rather than 100% relief.

This makes an up-to-date valuation and a review of ownership particularly important. A valuable farm or company may still create an Inheritance Tax bill, even where relief is available.

Qualification should never be taken for granted. Businesses mainly holding investments may not qualify for Business Relief, while Agricultural Relief applies to the agricultural value of qualifying property rather than automatically covering every asset connected with a farm. Ownership periods and the way assets are used can also affect the position.

Tax is only one part of the problem. The family may need enough accessible money to pay tax, settle debts, buy shares from other beneficiaries or keep the business running through a difficult period. A business that is valuable on paper may not have large amounts of spare cash.

Begin the handover while you can still guide it

The strongest succession plans often begin long before ownership formally changes.

A future successor may need time to build confidence, learn how decisions are made and develop relationships with customers, suppliers, staff or tenants. They also need the freedom to say whether taking over is genuinely what they want.

Some owners choose to step back gradually. Others retain control but give the next generation clearer responsibilities. There is no single timetable, but waiting for illness or a crisis removes choices.

It is helpful to consider:

• Who is willing and able to run the business or farm?
• Should ownership and day-to-day management pass to the same person?
• How will family members who are not involved be treated fairly?
• What money would be needed to meet tax, debts and running costs?
• Do the will, ownership records and business agreements work together?
• Who could make decisions if the current owner lost capacity?
• When was the business, land and other property last professionally valued?

These discussions may feel uncomfortable, but uncertainty is usually harder for a family than a clear decision.

Protecting what you have built

A good succession plan gives a business or farm the best chance of continuing without leaving the family to untangle ownership, control and tax under pressure.

It should reflect the people involved, the structure of the business and what the owner actually wants to happen. As families, values and tax rules change, the plan should be reviewed rather than placed in a drawer and forgotten.

Westfield Wills can help business owners and farming families bring their wills, succession wishes and wider estate planning together. Starting the conversation now can protect both the people you care about and the work you have spent years building.

Important information: This article is provided for general information only and does not constitute legal, financial or tax advice. Estate planning and tax treatment depend on individual circumstances and the rules may change. Agricultural Relief and Business Relief are complex areas, so specialist legal and tax advice should be obtained before making decisions.

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