You’ve spent a lifetime building up your family business, growing the company and creating a lasting legacy for your nearest and dearest.
But at some point you’ll want to hand the business over to the next generation. What are the signs that it’s time to step back? And when is the right time to put your succession plan into action and pass the reins to your successor?
Stepping back from the business and starting a new life in retirement, or working on a new business idea, probably sounds appealing. But it’s important to have a clear succession plan in place, and to pass on the business at the right time.
Update, October 2026: these changes became law in Finance Act 2026 and apply from 6 April 2026. For deaths on or after that date, 100% Business Relief and Agricultural Property Relief are capped at a combined £2.5 million of qualifying property, with 50% relief above that. Any unused allowance can be transferred to a surviving spouse or civil partner. GOV.UK explains what qualifies for Business Relief.
Key points
- You and your successor both need to be ready.
- Hand over from a position of strength, when the business is stable.
- Think about market conditions and family circumstances, not just your own timetable.
- A written succession plan, and early tax advice, help the handover go smoothly.
On this page
Five signs the time may be right to step back
When you, the founder, are ready
Your own readiness to step back from the day-to-day running of the family business is a crucial factor. You need to feel ready to hand over control, be confident in your successor and have a clear idea of your future role. Will you leave completely, or stay on as an adviser or board member?
When your successor is ready
Your chosen successor also needs to be ready. They need the skills, experience and commitment to lead the business, and to be prepared to take on the responsibilities and challenges of running a family business, through good times and bad.
When the business is looking stable
Change can be a challenge in any business, so it’s best to change leadership when the company is looking strong and stable. That gives you firm foundations for the transition. Make sure the business is in good financial health, has a strong customer base and is in a good position compared with its closest competitors.
When the timing and conditions are right
Handing the business over in tough market conditions is rarely ideal. Look at external factors such as economic conditions, industry trends and family circumstances, and think about whether now is a good time for the transition, or whether it’s better to wait and ride out the storm.
When you have a clear succession plan in place
Moving a business from one generation to the next is a complex and often challenging process, so there’s real value in having a well-crafted succession plan. It should set out the transition process, roles and responsibilities and the future ownership structure, so that the handover runs smoothly.
Don’t leave tax until last
Passing on shares or business assets, whether you give them away, sell them or leave them in your will, can have Capital Gains Tax and Inheritance Tax consequences for you and your family. Reliefs such as Business Relief for Inheritance Tax may help, but the conditions are detailed.
The rules for Business Property Relief and Agricultural Property Relief are also due to change from 6 April 2026, as set out in HMRC’s policy paper. At the time of writing, in January 2026, the changes are in the Finance Bill and are not yet law. They can also affect some lifetime gifts made on or after 30 October 2024, where the person making the gift dies on or after 6 April 2026 and within 7 years of the gift. The timing and structure of a handover can affect the tax position, so talk to us well before anything is agreed or signed.
Sources
Our main sources are HMRC and GOV.UK:
- Business Relief for Inheritance Tax
- HMRC policy paper: Agricultural property relief and business property relief changes
Talk to us about your succession plans
Ending your own journey with your family business is a big step, and a handover runs far more smoothly with plenty of planning.
Talk to our team about your plans for the future, your hopes for the business and what should go into your exit strategy and succession plan. Call us on 020 7164 0225, send us a WhatsApp message or email us at info@ibandco.co.uk.
You can also read about our Inheritance Tax planning and strategic and business planning services.
First published 13 January 2026. Tax content checked on 9 October 2026. This article reflects the rules at the date it was first published. Where something has changed since, we’ve added an update note. Rules and rates change, so please check with us before acting.
Please note: this article is general information based on our understanding of UK tax rules at the date shown above. It is not advice for your circumstances, and tax rules and rates can change. Please speak to us before acting on it.
Ishmael Bangura FFA
Ishmael Bangura FFA is a qualified tax adviser and Fellow Financial Accountant with a finance degree and about 15 years’ experience, including earlier corporate roles. He has helped more than 950 clients. IB&Co Accountants is regulated by the IFA and IPA. IB&Co is based at Level 37, 1 Canada Square, Canary Wharf.
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