Business Property Relief has been capped since 6 April 2026. For owners of UK businesses valued above £10 million this removed a relief many families had built their succession plans around and has prompted a fresh look at ownership structures. 

What changed in April? 

The Autumn Budget 2025 confirmed a significant change to the tax treatment of how business assets pass on death. Since 6 April 2026: 

  • Business Property Relief has been capped. It historically allowed qualifying trading business assets to pass free of inheritance tax. 
  • The first £1 million of qualifying assets per person still attracts 100% relief. 
  • Value above that threshold attracts only 50% relief, producing an effective 20% inheritance tax rate. 
  • The £1 million allowance is transferable between spouses and civil partners and is frozen until the 2030/31 tax year. 

For established UK trading companies and family businesses valued above £10 million, the question becomes how to manage liquidity, control and administration around an eventual tax charge rather than assuming the business will always be fully sheltered. 

Separating control from ownership 

A limited partnership, whether a UK limited partnership or a Jersey limited partnership, separates management from economic ownership: 

  • A general partner, usually a corporate vehicle, controls and administers the partnership's assets. 
  • The limited partners hold economic interests but no management role. Their liability is capped at what they have contributed.

Applied to a UK SME the founder(s) can transfer shares or business assets into the partnership and retain control through the general partner vehicle. Limited partnership interests can then be gifted or restructured to the next generation over time. This is sometimes referred to as a family limited partnership (FLP) structure. 

What a GP/LP structure gives you 

Tax transparency. A partnership is not a separate taxpayer. Income and gains flow through to the partners and are taxed according to each partner's own position. The practical effect is that the structure adds no extra layer of tax. Reporting sits with individual partners rather than with an opaque entity – it is transparent for taxation purposes. 

Gradual and controlled succession. As a consequence of the general partner and limited partner interests being separate, a founder can begin transferring economic value while retaining operational control of the business for as long as that suits the family. Transfers can happen on a timetable the founder sets rather than one imposed by events providing flexibility and an element of future proofing. 

Simpler estate administration. A partnership interest is a single definable asset. A business might otherwise involve multiple share classes, shareholder agreements or fragmented family holdings. Consolidating into partnership interests simplifies what has to be identified, valued and administered on death. It also narrows the scope for disputes between beneficiaries about management versus inheritance – the two are distinct. 

Tailored governance terms. Jersey partnership agreements can be drafted with considerable flexibility around profit sharing, decision making and succession mechanics, which UK company law does not allow to the same degree. 

Cost, complexity, confidentiality 

None of this is a substitute for the underlying tax analysis and it is not free of cost or risk: 

  • Cross-border structuring adds complexity and cost. Jersey structures bring administration, filing and professional fees. 
  • Tax transparency must be confirmed, not assumed. The treatment that applies for UK purposes needs to be established for each specific structure and asset class. 
  • Register privacy. Jersey partnership agreements are private documents and only limited details are placed on the public register.  

Conclusion 

The Budget changes have made succession planning for UK business owners a live issue rather than a background assumption. A GP/LP structure formed in the UK or Jersey offers a tax-transparent way to separate control from economic ownership and to plan transfers over time. 

Whether it is the right tool depends on the value of the business, the appetite within the family for gradual transfer of control and an honest comparison against simpler alternatives. The structure should follow the objectives of the family rather than tax efficiency alone. 

Whitmill works closely with legal, tax and financial advisers, integrating smoothly into established professional relationships and ensuring that structuring decisions are implemented cleanly and without friction. 

To discuss how Whitmill can support your succession planning, contact Sean Le Scelleur – Director, Business Development – sean@witmill.com 

Whitmill does not provide legal, taxation or investment advice and we recommend that independent advice is taken.