You have probably spent years building your business. Most owners have a plan for growing it but not for what happens if they die or become too ill to run it. Business succession planning deals with that question. This post explains how your Will and a Lasting Power of Attorney fit into it, how Business Relief works from April 2026, and where you will need other professionals.
What is business succession planning?
Business succession planning is working out how ownership and control of your business will pass on when you retire, if you lose mental capacity, or when you die. A good plan answers a few practical questions:
- Who will run the business day to day, and are they ready to do it?
- Who will own it: family, co-owners, employees or a buyer?
- How would a buyer or co-owner fund any buyout, and what is the business worth?
- Who can make decisions if you are alive but unable to make them yourself?
- What documents need to say the same thing: your Will, your LPAs, the company’s articles of association and any shareholders’ or partnership agreement?
Some of these are legal questions, some are commercial and some are tax and financial questions. A.D.E. Wills deals with the Will and LPA side. For valuations, funding, insurance and tax planning, we can refer you to an appropriate professional.
Your business and your Will
How your business passes on depends partly on its legal structure.
- Sole traders: the business assets belong to you personally and pass under your Will like your other property.
- Partnerships: the partnership agreement usually decides what happens to your share when you die, so your Will needs to work with it. Where there is no agreement, the Partnership Act 1890 can bring the partnership to an end.
- Limited companies: the company carries on after your death, but your shares form part of your estate and pass under your Will.
Leaving company shares in your Will
You can leave shares as a specific gift to a named person, for example a child who works in the business. Before you do, check the company’s articles of association and any shareholders’ agreement. These often restrict who can receive shares, or give the other shareholders a right to buy them first. A gift in your Will cannot override those terms, so the documents need to line up.
Some shareholders put in place agreements that let the survivors buy a deceased shareholder’s shares, sometimes funded by insurance. Solicitors and financial advisers arrange these. We do not advise on them, but we can draft your Will so that it reflects the agreement.
Business trustees and the power to carry on a business
Your executors may not be the right people to make business decisions. Your Will can appoint separate business trustees to deal with your business interests. It can also give them an express power to carry on the business until a sale or handover. Without that power, executors have limited ability to keep a business trading. This helps reduce the risk of the business losing value while your estate is being dealt with.
Business Relief and inheritance tax from April 2026
Business Relief (often still called Business Property Relief) can reduce the value of qualifying business property for inheritance tax. The rules changed on 6 April 2026.
- Qualifying property includes a business or an interest in a business, and shares in an unlisted trading company. You usually need to have owned it for at least two years.
- 100% relief now applies only to the first £2.5 million of qualifying business and agricultural property combined. Relief above that is 50%.
- Any unused part of the £2.5 million allowance can pass to a surviving spouse or civil partner.
- Shares listed on AIM now receive 50% relief, not 100%.
- Land, buildings or machinery that you own personally but your company or partnership uses may qualify for 50% relief.
- Businesses that mainly deal in investments, such as letting property, generally do not qualify.
Who you leave business property to can affect how much relief applies and how much tax your estate pays. Gifts during your lifetime raise further questions, such as capital gains tax and the seven-year rule. These are tax advice questions, so speak to your accountant or a tax adviser. We can refer you to an appropriate professional. You can read HMRC’s overview at GOV.UK: Inheritance Tax.
A Business Lasting Power of Attorney
Succession planning is not only about death. An accident or illness could leave you unable to make decisions for months or longer. A Lasting Power of Attorney lets people you choose make decisions for you if that happens.
There is no separate legal form called a “Business LPA”. It is a property and financial affairs LPA limited to your business affairs. Many business owners make one alongside a personal property and financial affairs LPA, so that someone who understands the business deals with it while family members handle personal matters.
A few points to be aware of:
- You must make an LPA while you have mental capacity. Also, nobody can use it until the Office of the Public Guardian has registered it. Registration currently takes around 8 to 10 weeks, so it is better done early.
- An attorney can usually exercise your rights as a shareholder, such as voting your shares. Acting as a director is different. A directorship is a personal office, and an attorney generally cannot act as a director in your place unless the company’s articles allow for it.
- If you are the sole director, check what the articles say about appointing a new or alternate director. Your accountant or a solicitor can advise on any changes to the articles.
- Banks often have their own requirements before accepting an attorney on a business account.
Our Business LPA is a fixed fee, and the Office of the Public Guardian’s registration fee of £92 per LPA is extra. Prices are on our LPAs Pricing page, and you can read more about Lasting Powers of Attorney.
First steps
- Start early. You have more options while you are well and the business is running normally.
- Decide what you want. Do you want the business kept in the family, sold, or passed to co-owners or staff?
- Gather your documents. Your existing Will and LPAs, the articles of association and any shareholders’ or partnership agreement.
- Take the right advice. Your accountant for tax and valuation, a financial adviser for funding and insurance, and A.D.E. Wills for your Will and LPAs.
- Tell the people involved. Successors, co-owners and executors should know what the plan is.
- Review it. Revisit your plan when the business, the tax rules or your family circumstances change.
Talk to A.D.E. Wills
If you own a business and want your Will and LPAs to reflect your plans, Edward is happy to talk it through. Call 01865 507174 or email info@adewills.co.uk. You can also read more about our estate planning services.
