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Inheritance Tax: Family-owned Businesses
03 June 2025
Lead MP
Susan Murray
Mid Dunbartonshire
LD
Responding Minister
James Murray
Tags
TaxationEmployment
Word Count: 4247
Other Contributors: 10
At a Glance
Susan Murray raised concerns about inheritance tax: family-owned businesses in Westminster Hall. A government minister responded.
Key Requests to Government:
The proposed changes to business property relief will lose the Government nearly £1.9 billion, according to the Confederation of British Industry estimates. Before implementing these changes, the Government should conduct a consultation that assesses their impact on family businesses and local communities.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Family-owned businesses are facing significant challenges such as national insurance increases, which threaten growth and investment. According to the Fraser of Allander Institute, many businesses are scaling back workforce expansion plans. The Centre for Economics and Business Research found that family-owned businesses provide employment for nearly 16 million people and contribute more than £200 billion in taxes annually.
Anna Gelderd
Lab
South East Cornwall
Asked whether changes to inheritance tax should be carefully shaped to support local businesses and farms in planning for the future.
Carla Lockhart
DUP
Upper Bann
She highlights a Family Business UK report showing potential losses in her constituency and across the United Kingdom due to the proposed changes, advocating for the scrapping of the 'death tax'.
Harriett Baldwin
Con
West Worcestershire
The research published by Family Business UK points to a reduction of £18 million in gross value added and 286 full-time equivalent jobs due to inheritance tax reforms.
Graeme Downie
Lab
Dunfermline and Dollar
The hon. Member for Dunfermline and Dollar suggests allowing businesses to pay inheritance tax if passed on to another family member, ensuring the tax liability is met without impacting future generations.
Graham Stringer
Lab
Blackley and Middleton South
J. W. Lees and Joseph Holt are examples of family businesses that contribute significantly to local communities in the hon. Member's constituency, highlighting the importance of a consultation on proposed changes.
Jim Shannon
DUP
Strangford
Taxing businesses at 20% based on their value at the owner's death does not account for the personal input of the business owner, potentially destroying the farming sector.
Orkney and Shetland
He questions whether HMRC's guidance for valuations of companies reflects the actual value of assets, pointing out that current valuations often differ from an asset’s market value.
Richard Baker
Lab
Glenrothes and Mid Fife
Recognises the need for the Government to raise funds but suggests family businesses have alternative proposals. Asks if the Minister would meet and consult with these businesses.
Edward Leigh
Con
Gainsborough
It is unclear why the Government focuses on family farms despite offers from the National Farmers Union for compromises to ensure that these businesses continue to be run by families.
Questioned why the Government do not consider taxing large digital multinational corporations trading in the UK to raise extra revenue instead of implementing measures that affect small businesses.
Government Response
James Murray
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government
Government Response
Explained that the full unlimited relief introduced in 1992 has become unfair and unsustainable. Mentioned that under the reformed system, estates will still benefit from 100% relief on the first £1 million of combined assets from April 2026, with an uncapped 50% relief on further assets. Highlighted that inheritance tax will be paid at a reduced effective rate of up to 20%. Discussed the digital services tax and support for OECD's two-pillar solution.
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Assessment & feedback
Summary accuracy
About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.