From 6th April, changes to Business Property Relief has removed or reduced inheritance tax protections on certain business assets. The policy shift is forcing many UK business owners and boards to confront succession decisions they’ve been deferring for years.
What we’re seeing across our work at Holmes Noble is that most organisations don’t have the leadership pipeline to handle a genuine ownership transition.
Business Property Relief has historically allowed business owners to pass on trading businesses without incurring inheritance tax. The changes announced in the 2024 Autumn Budget, which are expected to come into effect from April 2026, mean that only the first £1 million of combined business and agricultural assets will receive 100% relief from inheritance tax. Assets above this threshold will receive 50% relief, implying an effective inheritance tax rate of up to 20% on those assets.
What just changed
For family-owned businesses and those with significant asset values, this changes the economics of holding versus selling. In practice, that means decisions that used to be planned over, say, a decade, may now be forced within a few years.
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This won’t affect every business equally. Owner-managed firms with strong second-tier leadership may navigate this smoothly. But those firms didn’t develop bench strength accidentally. They invested years in intentional leadership development, giving emerging leaders exposure to board-level decision-making long before it became urgent.
For founder-led businesses, family enterprises with concentrated ownership, or firms where succession has been deferred year after year, the tax changes compress timelines that were already too tight.
In one recent case we’ve seen, a founder in their late 60s accelerated an exit timeline by nearly five years following the Budget changes, only to realise there was no viable internal successor ready to take on the role. What followed wasn’t a smooth transition, but a rushed external search for a new CEO under significant commercial pressure.
For years, succession planning has been a spreadsheet exercise. A few names. A vague sense of who’s “next in line”. But when tax changes force your hand on timing, you quickly discover whether you actually have leaders ready to take over. And the answer, more often than not, is “no”.
The leadership gap is wider than you think
Research we conducted last year with over 40 CPOs across FTSE 100/250 companies, high-growth scale-ups and the public sector, found an adaptive leadership gap in 65% of organisations when it comes to HR capabilities needed for 2027-2029. While the sample is modest, the consistency of responses across sectors was striking. We’re talking about capabilities needed within the next one to three years.
The problem runs deeper than HR capabilities alone. We’re seeing a 67% CEO readiness gap across the organisations we surveyed. Two-thirds of potential successors aren’t prepared for boardroom leadership realities. Organisations have misunderstood what it takes to develop C-suite leaders.
The Business Property Relief changes will accelerate exit timelines for many owners. Some by choice, others by necessity. But you can’t accelerate an exit plan without accelerating leadership readiness. If your succession pipeline wasn’t fit for purpose six months ago, it won’t be now.
Why traditional succession planning fails
Most succession planning is reactive, not strategic. In many cases, it exists more to reassure boards than to reflect reality. We wait until someone announces their departure, then scramble to find a replacement. Or we assume high performers will naturally become strategic leaders, given time and exposure.
But in all likelihood, they won’t. At least, not without deliberate intervention.
Our CPO research shows organisations must shift from reactive recruitment to proactive workforce planning that’s connected to five-year business strategies. This requires CEO sponsorship and a fundamental rethink of how we develop leadership capability.
Traditional leadership development focuses on the wrong things. We send people on generic programmes, rotate them through functions, e give them bigger teams to manage. But we don’t prepare them for the messy, ambiguous, high-stakes decisions that define C-suite leadership.
This is precisely why we created The Ascent. The acceleration programme pairs N-1 and N-2 leaders with experienced CEOs over time, prioritising real exposure over theory.
Our CPO research showed leadership development must accelerate adaptive capabilities, balancing emotional intelligence with technical competence through hands-on, experiential learning. Not theoretical frameworks. Not classroom exercises. Real scenarios, real stakes, real consequences.
What HR leaders should be doing right now
First: Stress-test your pipeline. Map your leadership pipeline against realistic transition scenarios, not optimistic ones. Ask yourself: if your CEO announced tomorrow that they were leaving in six months, who could credibly step in? If the answer is “no one” or “maybe someone”, that’s your baseline problem. Now map that across your entire C-suite.
Second: Prioritise adaptive capability. Audit for adaptive capability, not just technical competence. The executives who thrive at C-suite level can navigate ambiguity, manage competing stakeholder demands and make calls with incomplete information. You can teach many skills in a workshop. But leaders fully develop through years of exposure to board-level decision-making. If your high-potentials aren’t getting that exposure now, they won’t be ready when you need them.
Third: Create real-stakes development. Build leadership development around real consequence, not simulation. Programmes that pair emerging leaders with board-level mentors, put them in front of investor presentations, or give them accountability for strategic projects deliver capability that generic training never will. At Holmes Noble, we’ve seen this approach work through our Ascent programme and similar initiatives across industry. The common thread is creating pressure and consequence.
Fourth: Treat wellbeing as infrastructure. Integrate wellbeing as a performance lever. Our research found organisations need to embed wellbeing into performance management systems, equip middle managers with mental health literacy and create psychological safety. Burned-out leaders can’t think strategically. If your succession candidates are firefighting constantly, they’re not developing the capability you need. Worryingly, many CPOs voiced concerns about the pressure their middle managers are under. This does not bode well for the c-suite pipeline.
Fifth: Rebuild your EVP for today’s workforce. Redesign your Employee Value Proposition for reality, not aspiration. Today’s workforce wants connection, belonging, flexibility and tangible impact. If you’re still selling “career progression” and “competitive benefits”, you’re losing the talent pipeline battle before succession planning even becomes relevant.
The real cost of waiting
The Business Property Relief changes are a catalyst, not the cause. The succession crisis has been building for years while organisations put short-term performance ahead of long-term leadership development. Now we’re seeing the consequences.
For HR leaders, this is your moment. Not to panic, but to act. Push for investment in leadership development. Demand that succession planning moves from spreadsheets to strategy. Insist on the long-term thinking that builds organisational resilience.
Because when the next wave of transitions happens, and it will, the organisations that survive will be the ones who invested in their leadership pipeline, years before they needed it.
Amy Speake is the CEO of a global talent advisory firm, specialising in leadership strategy and board advisory. With over 20 years of experience partnering with FTSE 100 and international organisations, she leads transformative change and delivers strategic insights that shape the future of leadership. Amy writes regularly on resilient leadership, talent trends, and the power of adaptive strategy.
- Amy Speake
