Why business owners should not overlook their will and why it might be time for a review

Your business is more than a livelihood, it is the result of your passion, hard work, and dedication.

Whether you are a sole trader, a company director, or a partner in a firm, proper will planning is essential to ensure your business interests are dealt according to your wishes when you are no longer here.

Your will should:

• Clearly outline your intentions for your business. 
• Appoint executors who understand your business and can act quickly. 
• Not contradict any existing partnership or shareholder agreements. 
• Provide clarity and reassurance to your family, employees, and others involved in your business.

Considering the business structure

The structure of your business affects how it is managed after death:

• Sole traders: The business typically ceases upon death, and the assets must be realised by your executors. 
• Limited companies and partnerships: Pre-existing agreements should govern succession. Your will should align with these and may need to ensure your executors are empowered to manage or transfer your interests.

Why business owners may need to review their will

Even if you already have a will, it is worth reviewing it regularly, particularly if it includes business asset trusts or assumes eligibility for reliefs like agricultural property relief (APR) or business property relief (BPR).  Recent changes to UK inheritance tax legislation mean that many existing wills may no longer be fit for purpose or offer the same inheritance tax reliefs they once did.

From 6 April 2026, the following key changes will come into effect: 

• BPR and APR will be capped at £1 million per individual for 100% relief. Any value above this will only qualify for 50% relief, meaning up to 20% inheritance tax could be payable on the excess. 
• Unused allowances are not transferable between spouses or civil partners, which could result in lost relief if wills are not structured appropriately.

Therefore, business asset legacies or trusts which would previously have received 100% relief may be liable for inheritance tax after 6 April 2026, depending on the beneficiary and the value of the assets.

Whilst passing business assets to a spouse or civil partner under your will is initially inheritance tax efficient due to the spousal exemption, it may lead to a higher overall inheritance tax liability on second death if the new business relief rules are not utilised on the first estate.

In any event, if your business has evolved, changed ownership, diversified its activities, or holds assets that may no longer qualify for relief, it is especially important to revisit your will. A review with a solicitor or tax advisor can help ensure your estate planning remains aligned with your current goals and circumstances and explore whether alternative strategies may now be more suitable.

What should business owners do?

If you are a business owner and have not reviewed your will recently, or if you do not yet have one in place, now is a good time to seek advice. A carefully structured will can protect your business interests, minimise disruption, and provide peace of mind for you and your loved ones.

A solicitor and a tax advisor would be pleased to arrange a joint meeting with you, if appropriate, to review your current arrangements and discuss estate planning options tailored to your individual circumstances. Please get in contact with us if you would like our assistance.