UKHospitality has called on the government to reconsider proposed reforms to Inheritance Tax in its budget submission and evidence to the House of Lords Economic Affairs Finance Bill Sub-Committee inquiry on the issue.
The trade body has warned that changes to business property relief (BPR) risk “forcing the sale of viable businesses, undermining generational succession, weakening rural and coastal economies, and reducing reinvestment and long-term tax receipts”.
The government’s IHT proposals, first laid out by Chancellor Rachel Reeves in her budget on 30 October 2024, will see the full 100% relief from Inheritance Tax restricted to the first £1m of combined agricultural and business property, from April 2026.
Recent UKHospitality member survey data found 47% of family-owned hospitality businesses expect to be directly affected, with 51% cutting back investment and a fifth anticipating being forced to sell up.
As a result, the group is calling for a pause and extension of consultation with full sector engagement, a delay to implementation until at least 2029, and preservation of the principles behind APR and BPR to safeguard productive capital and generational continuity.
“These reforms are flawed in design, rushed in process, and unfairly target small and medium-sized family businesses,” said UKHospitality chair Kate Nicholls. “Without changes, many operators will be forced to sell assets in weak markets, with devastating consequences for jobs, investment and communities.
“The principle behind business property relief was to safeguard family-run businesses, but these changes sadly do the opposite. I urge the government to think again and reconsider these reforms.”
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