Transferring a business to a family member

Tax implications of family succession

Guide

Think carefully about the tax implications of family succession.

Business Asset Disposal Relief

You may be able to pay less Capital Gains Tax when you sell (or ‘dispose of’) all or part of your business.

Business Asset Disposal Relief was known as Entrepreneurs’ Relief before 6 April 2020.

Read more about Business Asset Disposal Relief.  

Inheritance tax reliefs

You may qualify for business-property relief from inheritance tax if you sell or pass to relatives:

  • your business
  • an interest in your business - your share of a partnership, for example
  • shares in your limited company

Find out more about inheritance tax reliefs.

Capital Gains Tax

If you dispose of your business to a relative, other than your spouse or civil partner, you may have to pay Capital Gains Tax on any gains made on these 'assets'. Note that the open market value of the assets of the business may be used in calculating the taxable gains if the disposal of an asset is for less than this value, or for something that cannot be valued.

Read more about Capital Gains Tax.

When examining your options, always seek expert advice from your accountant and solicitor.