Family business owners have been reassured that the government has no plans to remove a valuable inheritance tax relief.
A recent report by the London School of Economics, which had called for the removal of business property relief (BPR) for inheritance tax, prompted the Institute for Family Business (IFB) to meet Exchequer Secretary David Gauke.
The IFB said that removing BPR – which takes certain business assets out of inheritance tax – would badly hit UK family businesses, as the inheritance tax payable on businesses would make it much more likely those inheriting would have to sell or liquidate the firm or borrow heavily to meet tax liabilities.
At the Treasury meeting, IFB chairman Ross Warburton said that without BPR his family firm, the bakers Warburtons, “we would have been forced to sell the business and would not have been able to pay the inheritance tax duties after the deaths of the previous generation of owners”.
Mr Gauke reassured the IFB that BPR had not been recommended for removal in a recent review by the Office of Tax Simplification.
Speaking after the meeting, IFB director general Grant Gordon said: “BPR needs to be retained in full as its removal would have a devastating impact on growth of successful family businesses, and on investment in the sector.”