A joinery firm in Chesterfield, thirty-one years old, eighteen staff, a workshop it owns and a turnover just under £2.4m. The owner is sixty-two. His daughter runs the office and is good at it. His workshop manager has been there nineteen years and effectively runs production. Neither of them has ever been told what he intends, because he has not decided, and every time he thinks about it something more urgent happens.
He will probably still be there at sixty-eight. That is the usual outcome, and it is the one that produces the worst result for everybody.
The three routes out, and what each one asks
A trade sale to a competitor or a consolidator usually pays the most cash on completion, and asks the least of the people who stay. It also means handing your name and your staff to somebody whose plans you do not control, and buyers rarely pay full value in cash: expect deferred consideration and an earn-out tying you in for one to three years while you work for the new owner.
Family succession keeps the business where it is and often pays the least. The hard part is not tax, it is competence and fairness. Does the family member want it, and can they do it, and what do you do about the siblings who are not in the business. Handing a company to one child and cash to another sounds even until the company doubles or fails. The answer is usually a properly drafted shareholders' agreement and a will that were written at the same time by people who spoke to each other.
A management buyout sells to the people who already run it. They almost never have the money, so it is funded from the company's own future cash: a bank facility secured on the assets, some private equity or asset-based lending, and a large slice of vendor loan notes, meaning you are paid out of profits over several years and carry the risk that the team you chose does not perform. Most MBOs succeed. The ones that do not tend to be the ones where the retiring owner was the only person who could sell.
Then there is closing, which is a real option and an undervalued one. If the business is genuinely the owner, an orderly wind-down that pays every creditor and every employee properly is a better outcome than a sale that collapses.
The tax position changed in April 2026
The reason succession planning is on more agendas now than it was is that two long-standing reliefs moved.
Business Property Relief, which for decades took qualifying trading businesses out of Inheritance Tax entirely, was reformed following the Autumn Budget 2024. From 6 April 2026, 100% relief applies to a combined allowance of £1m of qualifying business and agricultural property, with the rate falling to 50% on value above that. For a business worth several million, that is a real Inheritance Tax exposure where previously there was none, and it changes the arithmetic of dying in harness rather than selling.
Business Asset Disposal Relief, the successor to Entrepreneurs' Relief, has a £1m lifetime limit on qualifying gains and its rate has been rising: it was 10% until 5 April 2025, 14% from 6 April 2025, and 18% from 6 April 2026. Rates and allowances are set by Finance Acts and are reviewed, so confirm the current position before acting on any of it.
The practical effect is that the gap between doing nothing and planning properly has widened. Neither of these is a reason to panic-sell, and both are a reason to have the conversation with an accountant and a solicitor together rather than separately.
An employee ownership trust is a sale, not a gift
Since the Finance Act 2014, an owner who sells a controlling interest to an Employee Ownership Trust can do so without a Capital Gains Tax charge on the disposal, provided a set of conditions is met. The trust holds the shares for the benefit of all employees, and the company can then pay employees an income-tax-free bonus of up to £3,600 a year, though National Insurance still applies.
It is a genuine route and it has become a common one for professional and craft businesses where a trade buyer would be disruptive. It is also widely misunderstood in two ways.
It is not free money. The trust buys the shares at an independently assessed market value, and it pays for them out of the company's future profits over several years. You are, in substance, being paid by your own business over time, with the same risk as vendor loan notes in an MBO.
And the conditions were tightened. Changes taking effect for disposals from 30 October 2024 require the trustees to be UK resident, prevent the former owner and connected persons from retaining control of the trustee board, require that the trustees take reasonable steps to ensure the price does not exceed market value, and extend the clawback period so that a disqualifying event in the four tax years following the disposal can bring the charge back to the seller. Structure it properly at the outset or do not do it.
Five years is the minimum run-up
Whichever route you take, the work is the same and it takes years.
The business has to become sellable, which mostly means it has to work without you. If you hold the customer relationships, price the jobs, approve the purchases and know where everything is, the business is a job rather than an asset, and a buyer will price it accordingly or walk away. Getting from there to a management team with real authority takes two or three years, because the constraint is not the org chart, it is whether you actually let go.
The records have to stand up. Three years of clean accounts, filed on time, with the personal expenditure taken out and the related-party arrangements normalised. A buyer's due diligence will find the van your son-in-law drives and the rent you pay yourself above market, and every one of those is a deduction from the price.
The paperwork has to exist. Written contracts with the customers who matter, employment contracts for the staff, title to the premises, the intellectual property actually owned by the company, and a shareholders' agreement with cross options and key person cover so that an unexpected death does not force a sale at the worst moment.
And the conversation has to be had. Tell the daughter and the workshop manager what you are thinking, early, even though you have not decided. The alternative is that one of them leaves for a business that has told them.
Where this shows up in the game
Business Baron does not end. A career passes from one generation to the next through succession, so handing over is a real event rather than an epilogue, and play carries on with whoever takes the business. The public leaderboard ranks dynasties by net worth, not single founders. Whether the business functions without you is visible in the figures long before it is visible to you.