As we are now in the heat of an election campaign we are being bombarded by various proposals. Many of these proposals cost millions, if not more and doubts obviously arise with regards their feasibility.
My proposal or set of proposals are less costly and more targeted.
As many of you know, I work a lot with family businesses. Family businesses remind me of the infamous speech given by late Sergio Marchionne at the Confindustria Young Entrepreneurs Conference in Santa Margherita Ligure, Italy, on June 9, 2012. In this speech, he famously discussed the balance between “the epoch of rights” and the “sense of duty”. In a family business the “right” to a salary or a position is often secondary to the “duty” of ensuring the business survives for the next generation.
The family business owners are frequently the first to arrive, the last to leave, and the ones who forgo their own “rights” during lean times to protect their employees. Marchionne’s warning that “if we live of only rights, we will die of rights” resonates deeply with family business entrepreneurs because they know that a business cannot be sustained by what it demands from the market, but by the sacrifices and commitment it pours into the business. It is this background and reality I see on a daily basis through various family businesses, that inspires my proposal.
The transition of the ownership of the family business and assets used in the family business, from one generation to the next, often poses a significant financial threat, particularly when substantial fiscal burdens are involved. Recognising this, government has extended a pivotal fiscal incentive, even in the 2026 Budget, allowing for the transfer of business ownership and related property at a significantly reduced stamp duty rate of 1.5%.
This measure aims to bypass the standard 5% duty that typically applies to the transfer of immovable property and the 2% or 5% duty (trading company vs property company) on marketable securities (shares), ensuring that capital remains within the business to fuel growth rather than being diverted to the taxman during a sensitive transition.
Where a business is transferred during the owner’s lifetime (Inter Vivos), the law provides a pathway to this reduced rate under the Duty on Donations of Marketable Securities and Immovable Property used for Business (Exemption) Order.
The 1.5% rate is not universal; it is a targeted incentive for intra-family succession. Qualifying recipients include Spouses and partners in a civil union and descendants in the direct line (children, grandchildren) and their spouses.
With regards qualifying assets for the 1.5% rate, there are two primary asset classes that benefit from this stamp duty reduction i.e. the shares in the family-owned business and the real estate used specifically for the business (e.g., a factory, retail outlet, or office). To qualify, the property must have been used by the business for at least three years preceding the transfer.
To prevent abuse of the system, the law mandates that the recipient must not sell or transfer the family business or property for at least three years following the donation. In the case of property, it must continue to be used for the business for a minimum of three years post-transfer.
Based on all the above, my proposal is made of a number of fine tunings to ensure that family businesses are preserved in the critical juncture of succession. Moreover, whilst I personally preach and advise family businesses to prepare and plan for succession at an early stage, I am aware that there will always be cases whereby succession needs to happen because the unexpected has happened, like the unexpected, sometimes early, death of a family business owner and leader. Ultimately there is an element of family business continuity that is a public good, regardless of the specific degree of kinship or minor administrative delays. Thus, the goal of my proposals is to ensure that when coming to the legitimate family business transfer there is an established safety net rate for scenarios that currently fall through the cracks.
Currently, if no ‘inter vivos’ succession transfer has taken place and, hence, a ‘causa mortis’ type of family business transfer has to be done, this would not qualify for the reduced 1.5% stamp duty, but the standard 5% stamp duty rate would apply. My proposal is to have a safety net rate which is higher than the reduced 1,5% stamp duty rate for ‘inter vivos’ transfers and lower than the 5% standard rate. This, in my opinion, would spare family businesses passing through a tragic situation from being ‘punished’ unnecessarily, without taking away from the more favourable reduced rate of duty for family businesses to plan ahead and go for an ‘inter vivos’ type of succession which, in the end, can bring more benefit to the family business and its future prospects.
Throughout Europe, tax relief for causa mortis (upon death) family business transfers is designed to prevent the fragmentation of small and medium enterprises and ensure operational continuity. Most jurisdictions recognise that high inheritance taxes or stamp duties can drain a company’s working capital, potentially forcing a liquidation or sale to external investors. For instance, Germany offers a robust “business succession” exemption where heirs can receive up to 100% relief from inheritance tax if they continue the business for seven years and maintain specific payroll levels. Similarly, the Netherlands utilises the Bedrijfsopvolgingsregeling (BOR), which provides substantial exemptions—often exceeding 80% of the business value—to ensure that tax liabilities do not jeopardise the company’s liquidity. The United Kingdom recently updated its Business Property Relief (BPR) to provide 100% relief on the first £2.5 million of combined business and agricultural assets, with a 50% relief thereafter. These measures collectively yield significant positive effects: they encourage long-term investment, protect local employment, and foster generational stability. By lowering the fiscal barrier to succession, European states effectively incentivise the survival of the family-owned model, which serves as a cornerstone for economic resilience and social cohesion across the continent. These reliefs ensure that the successor’s focus remains on strategic growth rather than servicing a sudden, massive tax debt during an already difficult period of transition.
Another issue that should also be addressed relates to the transfer of immovable property from the family business to a family member. As a practical example, let’s assume that a family business acquires a new warehouse but as part of the succession plan inter vivos, the owner chooses to pass that warehouse to one of his descendants. Should he choose to transfer the warehouse out of the business and to a family member, such a transfer would be subject to the full 5% duty because they missed the 3-year “pre-transfer usage” window by a few months. My proposal is to at least allow for a pro-rata reduction. If the property was used for less than 3 years but more than 1 year, the duty should be capped at a lower rate of 2.5%, provided the heirs commit to using it for the business for the subsequent 5 years.
In conclusion, the survival of a family business is important as these businesses are the bedrock of our economy, fuelled by family business owners who are fully committed to their business, often sacrificing everything to ensure the security of their employees and the future of their kin. By refining our tax laws to include this reduced duty safety net, we can ensure that we do not dismantle decades of hard work, by supporting the actively trading family businesses who pour their commitment into our community, ensuring that when the torch of leadership is passed, it is not extinguished by a tax burden, but remains a guiding light for the next generation.
