Business Succession

An agreement between shareholders giving the survivors an option to buy a deceased shareholder's shares and the estate an option to sell them, at a pre-agreed valuation method, usually funded by life policies written in trust. Because neither side is obliged to sell until the option is exercised, business property relief is preserved — a binding sale contract would lose it.

Shares in an unquoted trading company held for two years generally qualify; businesses that are wholly or mainly investment businesses (including most property-letting businesses) do not. Since 6 April 2026 relief has been 100% up to a £2.5 million allowance of qualifying business and agricultural property and 50% above (Finance Act 2026) — so the value of the business, and how it's held, now matters.

Often, yes, in stages — a lifetime gift of shares is a potentially exempt transfer, may qualify for holdover relief from capital gains tax, and lets you see how the next generation handles ownership while you're still there. The trade-offs are control and the possibility of a divorce or insolvency in the next generation, which trusts and the articles can manage.