More than 200,000 jobs can be lost in companies and farms managed by a family as a result of the upcoming changes in the rules of inheritance tax, according to the new research that warns of a major blow to investment, employment and long -term economic growth.
A survey at the country level found 4,200 companies owned by family and agricultural companies-commissioned by Lobby Group Family UK and conducted by the economy of the Central Bank of Iraq-that the government's decision to mitigate commercial properties and agricultural property has already has severe consequences, with more expected in 2026 on the rising.
From April next year, the inheritance tax will be reduced on the assets of business and agricultural business with a million pounds per property. After this threshold, relief will decrease from 100 percent to 50 percent. While individuals are still able to transport 325,000 pounds of tax exempt (rising to 1.5 million pounds for couples who pass homes to direct grandchildren), changes are expected to affect some of the most productive family companies in the United Kingdom-especially in agriculture.
According to the research, more than half (55 percent) of family companies have already been canceled or temporarily stopped since the changes of changes in October 2023, and nearly a quarter of a quarter of employment has been employed or reduced jobs. If these trends persist, the sector may lose 208,000 jobs between 2026 and 2029, including 28,000 in agriculture alone.
The report warns that this can wipe 14.4 billion pounds from the economy to the current parliament, with investment decreased by 19 percent on average and the number of employees decreased by 9 percent through family companies. The government, estimated at 500 million pounds annually, can be compensated for the reform for lost tax revenues, as the survey expected a net loss of 1.9 billion pounds in the same period.
“This research shows unambiguously that family companies will respond by reducing jobs and investment, which greatly reduces tax revenues,” said Neil Devi, CEO of the UK family company. “OBR must reassess the costs of its policy and the government must reconsider these devastating reforms.”
The budget responsibility office has already recognized that revenue estimates are subject to “high uncertainty”, warning that behavioral changes such as increased assets or business sales can limit the effectiveness of policy. This poll supports: One in ten companies said they are planning for sale to meet tax obligations, and 9 percent has already done so. Two -thirds of legal advice sought to mitigate the financial impact.
In 2021-22, more than 1,800 companies received 550 million pounds in the field of business and agricultural property, as the largest farmer represents approximately 220 million pounds of that. Critics of the current regime argue that relief is not commensurate with the wealthy landowners – a demand for the government that it cited in justifying the reform.
However, Davi claims that the effect will feel it all over the country. “It was not too late for the government to reconsider this policy. We have repeatedly requested work based on a solution that increases the necessary tax revenues while protecting jobs and re -investing in the backbone of family business in Britain.”
Family Business UK calls for a full consultation with ministers before implementation to explore more targeted reforms that balance the need for revenues with the need to support institutions and regional growth. Without turning in the approach, Davi warns that the tax can cause permanent damage to the “local employment engine and the economic flexibility of Britain.”