Why Business Owners Should Treat Inheritance Tax as a Balance Sheet Risk, Not a Future Problem

Why Business Owners Should Treat Inheritance Tax as a Balance Sheet Risk, Not a Future Problem

For many business owners and property investors, Inheritance Tax is seen as a distant concern — something to be dealt with later. In reality, it is a balance sheet risk that grows quietly alongside asset values.

Unlike income tax or corporation tax, Inheritance Tax is often triggered at the worst possible moment: death or loss of capacity. At that point, planning options are limited, and families are left reacting rather than controlling outcomes.

The Compounding Effect of Growth

Business success and property appreciation are positive outcomes, but they can unintentionally push estates into higher tax exposure. What may have been a manageable position ten years ago can quickly become a significant liability.

For owner-managed businesses, this can place pressure on trading cash, force asset sales, or create friction between beneficiaries.

Why Timing Matters More Than Tactics

Many tax strategies rely on time — whether that is gifting, reliefs, or structural planning. Leaving matters too late reduces flexibility and increases reliance on assumptions.

Early consideration allows planning to be integrated gradually, rather than imposed under pressure.

Treating Tax as Part of the Business Conversation

The most effective planning treats Inheritance Tax as part of the wider financial picture, not a standalone issue. This allows decisions to align with business continuity, family intentions, and long-term protection.

Planning early is rarely about avoiding tax entirely. It is about reducing disruption and protecting value.

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“Having seen John of Legacy Wills present at a property event, it was clear he had both the breadth of knowledge and experience and also the ability to make a very dry subject both understandable and engaging. That’s a tough call when talking about Wills, Trusts and death. John produced Wills and POA’s for myself and my wife in a timely, effective and reasonable manner. I have subsequently recommended him to numerous colleagues and friends to cut out the jargon and challenges surrounding this critical protection, which is too often deferred or neglected.”

Dan Norman