Business Owners: How To Include Your Company Shares In Your Will & Trusts

If you are a business owner, partner or director and have company shares or business interests, a standard will may not be sufficient. A well-structured business owner’s will needs to protect their family members, while also providing continuity or an orderly closure for the business, without halting operations, creating internal disputes, or forcing a rushed sale.

Wills for business owners, often referred to as Business Wills, are legal documents that set out the owner’s wishes regarding business interests and how those interests will be dealt with in practice. These specialised wills ensure that succession planning, passing on shares or business interests, and integrating business considerations are properly addressed for inheritance tax purposes and overall efficiency.

This guide explains how business owners in the UK can structure their planning, what considerations depend on the type of business involved, and which practical points require particular attention.

Key Takeaways

• A business owner’s will must be aligned with the company’s contract and articles of association to avoid conflicts.
• What happens to the business after the owner’s death depends on the type of business structure.
• Business holdings and assets are included in the calculation of inheritance tax, but specific reliefs may exist.
• From 6 April 2026, important changes will affect business property relief and succession planning.
• Without a Business Will, distribution follows the rules of intestacy, which can lead to undesirable outcomes. The administrators of your estate will distribute your estate according to the intestacy rules.
• It is essential to have a plan for business succession and to structure the transfer in a tax-efficient manner to ensure business continuity and minimise tax liabilities.

Why Business Owners Need a Different Approach to Wills

For most people, a will organises personal assets and facilitates the administration of the estate. For business owners, the problem is that the business is not just an asset. It is also a functioning system, with customers, employees, tax obligations and decisions that need to be made every day.

When planning their estate and business succession, business owners should ask themselves key questions, such as: Who will manage the business after my passing? How will my business interests be valued and distributed? Are there existing agreements that could affect my wishes? Addressing these key questions is essential to protect both the business and loved ones.

In the UK, any share in a business, or part of it, can be considered part of the estate for inheritance tax purposes. Depending on the case, the executor will need to assess these assets and deal with internal rules before even being able to deliver the share to the beneficiary. Writing a business owner’s will with the help of experienced legal professionals is crucial to ensure all legal, tax, and succession issues are properly managed.

In addition, what you write in your will may conflict with rules that already exist on paper, such as the company’s articles of association and shareholder agreements or partnership agreements.

In Scotland, even with a will, there are legal rights that allow a spouse or civil partner and children to claim a share of the estate, particularly the moveable estate, and it is not possible to completely disinherit these family members.

In England, Wales and Northern Ireland, there is greater freedom of disposition in wills, but certain family members and dependants may make claims for reasonable financial provision (family provision). When there are discrepancies, it is the family, the remaining partners and the business itself that are caught in the middle of the conflict. A structured succession planning process is essential to manage and distribute business assets effectively, ensuring business continuity and alignment with the owner’s wishes.

What Usually Happens to the Business if the Owner Dies?

The question seems simple: what will happen to the business if the owner dies? The answer depends greatly on how the business was structured.

Business owners must plan for the transfer of ownership after their death. Proper planning ensures that ownership rights are clearly defined and transferred according to the owner’s wishes, helping to preserve the business’s value and continuity.

Sole Trader Business

When the activity is carried out as a self-employed person, it is known as a sole trader business. There is no separate legal entity: the owner and the business are the same person. If you own a sole trader business, it will usually cease to trade after your death. This means that the set of assets linked to the activity, such as equipment, tools, inventory, contractual rights, and possibly the brand and goodwill, depending on the case, tends to be part of the estate.

It is crucial to plan ahead to ensure your business assets pass to the right person — someone with both the interest and skills required to run it. The most practical course of action may be to continue temporarily, close down and sell assets, or reorganise the operation, but this needs to be feasible and planned in advance. The main thing here is to reduce uncertainty.

If the family’s income depends on the activity, who will have the authority and information to keep it running in the short term? Without this, even a small business can quickly lose value.

Business Partners

In partnership arrangements, there is a classic legal risk. Unless otherwise agreed, the partnership is dissolved upon the death of one of the partners. This does not mean that everything automatically ends in all cases, but it does mean that the partnership agreement and the rules agreed upon between the partners are decisive. Before making a will, it is important to check the partnership agreement to understand what happens to your interest when you die, as your interests as a business partner will pass to your executors according to your wishes as outlined in the will.

When planning succession, it is crucial to consider the interests of your fellow partners and other partners, as they may be involved in buying or inheriting your share, or your interest may be transferred to them or to estate administrators, and a cross-option agreement can provide a clear buy–sell route on death.

Another important point is that even if the will states that the beneficiary inherits the share, this does not mean that they automatically become an operating partner in the business. In many scenarios, continuity and the entry of a new partner depend on what has been agreed and the consent of the remaining partners.

Limited Company

In a private limited company, what is transferred on death is the deceased’s shares. However, the transfer may be restricted by the company’s articles of association and any shareholders’ agreement. A will can specify who should inherit the shares, but it cannot override the company’s internal procedures or contractual arrangements between shareholders.

Directors may also have discretion to approve or refuse registration of a transfer, depending on the articles. If the board refuses to register it, the Companies Act 2006 requires the company to provide the transferee with the reasons as soon as practicable and no later than two months after the instrument of transfer is lodged. This highlights the need to ensure that the will, the articles and shareholder arrangements are aligned to reduce the risk of delay or dispute.

How to Include Your Company and Business Interests in Your Last Will and Trusts

A Business Will is a legal document that should clearly outline your wishes regarding your business interests. If you want to allow someone to run your business once you’re gone, it’s essential to plan ahead. The whole process of succession planning involves everything from initial planning and drafting your will to the final execution and transfer of business interests. Ensuring there are sufficient funds available for buyouts or to provide for dependents is a key part of this plan. It’s also important to handle sale proceeds correctly to maximise benefits for your heirs. Executors will distribute your interests, or money from the sale, according to the instructions in your will.

Instead of just thinking about leaving the company to X, planning usually works better when you clearly define three things.

First: What is the goal for the family? Some families want to keep the company under family control. Others prefer to receive the economic value, for example, through an organised sale, without getting involved in management. This choice changes the design of the will and agreements.

Second: what rules apply in practice? For partners, this is covered by the partnership agreement. For companies limited by shares, it is covered by the articles of association and any shareholders’ agreement. Good planning involves reviewing these documents to avoid promises that cannot be kept.

Third: how does the business operate between death and the settlement of the estate? Even when there is a will, it may be necessary to apply for a grant of probate (grant of confirmation in Scotland) or, if there is no will, letters of administration. During this period, decisions need to be made. If no one has authority, access to information, and internal legitimacy, the business can come to a standstill, directly affecting the amount the family would receive.

When Trusts Make Sense For Business Owners

Trusts are often part of planning when there is a need for protection and control, without blocking future flexibility. This often arises when beneficiaries are minors, vulnerable, or when there is concern about family disputes.

In simple terms, a trust can allow the family to benefit financially, for example, through distribution according to rules, without necessarily placing the company in the hands of someone who does not want or is unable to exercise control.

But a trust is a tool, not a shortcut. Depending on the type of trust and when it is created, there are tax rules and trustee obligations that need to be considered with professional guidance.

Inheritance Tax Planning: What Has Changed for Business Property Relief?

Inheritance tax is one of the most common reasons why businesses are sold hastily after the owner’s death. The estate may have tax to pay, but the main asset is illiquid.

In general, inheritance tax can be levied at 40% on part of the estate above the applicable limits. There is also a reduced rate of 36% for some assets when 10% or more of the net value is left to charity in the will.

For business owners, the important thing is Business Relief, which can reduce the value of the business (or certain business assets) when calculating inheritance tax. This relief can be 50% or 100%, depending on the type of asset and the situation, and is usually claimed by the executor when valuing the estate.

The government has published changes to business and agricultural property relief effective from 6 April 2026, introducing a new allowance of £2.5m for 100% relief and applying 50% above that amount, including rules relating to trusts.

This means that many business owners need to revisit their estate planning. Rather than assuming that the business will be fully protected by reliefs, it is now essential to understand whether there will be partial exposure and, most importantly, how the estate will have the liquidity to meet obligations without eroding the business’s worth.

Why Choose MJR Solicitors?

Planning for business succession can be uncomfortable, but the consequences of not planning are often worse. Family disputes, operational bottlenecks, loss of value and hasty decisions at an already emotionally difficult time.

MJR Solicitors focuses on providing clear guidance, without excessive jargon, helping clients to structure wills, trusts and estate administration with a realistic view of what happens in practice when a company is involved.

If you are a business owner and want to understand how a business owner’s will might suit your circumstances, seeking advice early on often broadens your options and reduces risks.

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Summary

Including a company in your will is not just about leaving shares to someone. Business owners must have a last will that specifically addresses business ownership and succession, ensuring that the transfer of ownership is clear and legally sound. What works best is planning that aligns the will with business documents, defines who can make decisions in the short term, and considers trusts when the family needs protection and flexibility. Managing the process carefully helps ensure a smooth transition of ownership and continued operation of the business according to your wishes.

With significant changes expected in April 2026 in the relief applicable to business assets, reviewing succession planning in advance can avoid surprises and reduce the risk of decisions forced by a lack of liquidity.

Frequently Asked Questions About a Business Owner’s Will