{"id":512159,"date":"2025-01-13T12:37:58","date_gmt":"2025-01-13T12:37:58","guid":{"rendered":"https:\/\/www.constructionnews.co.uk\/?p=512159"},"modified":"2025-01-17T17:32:25","modified_gmt":"2025-01-17T17:32:25","slug":"treasury-ignored-inheritance-tax-warnings-wates-boss-reveals","status":"publish","type":"post","link":"https:\/\/www.constructionnews.co.uk\/contractors\/wates\/treasury-ignored-inheritance-tax-warnings-wates-boss-reveals-13-01-2025\/","title":{"rendered":"Treasury ignored inheritance tax warnings, Wates boss reveals"},"content":{"rendered":"

A family member of one of the industry\u2019s biggest construction firms has accused the government of ignoring warnings over the impact of inheritance tax changes.<\/p>\n

Wates<\/a> board member James Wates, who also chairs advocacy group Family Business UK (FBUK), said it lobbied HM Treasury on keeping Business Property Relief (BPR) in the run-up to the Budget last October but hit a \u201cblank wall\u201d.<\/p>\n

In an exclusive interview with Construction News<\/em>, Wates said: \u201cThey didn\u2019t want to listen to us.\u201d<\/p>\n

In the Budget, chancellor Rachel Reeves announced reforms to BPR<\/a> that mean many previously exempt privately-owned family-run businesses will from April 2026 face inheritance tax bills.<\/p>\n

Under the proposed changes, only the first \u00a31m of the value of a family business will be completely exempt from inheritance tax.<\/p>\n

The remaining share of the business will be subject to a 50 per cent relief, meaning beneficiaries will pay 20 per cent rather than the 40 per cent levied on a personal estate.<\/p>\n

The tax can be paid in instalments, with the first due six months after the person has died.<\/p>\n

For family members who inherit a \u00a350m construction business, this means they will pay inheritance tax at a rate of 20 per cent on \u00a349m. This would leave an inheritance tax bill of \u00a39.8m.<\/p>\n

Wates said the impact of the tax change would be \u201cpretty seismic\u201d and could impact other CN100 firms including Sir Robert McAlpine<\/a>, Willmott Dixon<\/a> and Bowmer & Kirkland.<\/p>\n

He warned investment decisions will be made more difficult because returns on growth would increase the future tax bill.<\/p>\n

\u201cFamily-run construction firms have got to think about how they plan succession and how they can afford to pay the tax when it becomes due,\u201d he said. \u201cDoes that mean I invest in the business? Or do I have to take some money out to protect myself for the future?\u201d<\/p>\n

Wates said that if the government presses ahead, the sector could be reduced as families would sell up rather than continue.<\/p>\n

He warned: \u201cWhat is likely to happen is that more businesses will be sold. They\u2019ll be snapped up by private equity and bigger competitors. The uniqueness that comes with our businesses being in the community and working with people will go.\u201d<\/p>\n

And Wates warned that family-run businesses will not let the matter drop.<\/p>\n

\u201cThis is the first skirmish in a long battle,\u201d he said. \u201cThe case for BPR is so sound that we have to ensure that even if this government [removes it], a future one will bring it back.\u201d<\/p>\n

An HM Treasury spokesperson said in a statement: \u201cOur commitment to the construction sector is resolute \u2013 by capping corporation tax at 25 per cent, confirming full permanent expensing, and establishing a National Wealth Fund and pension megafunds, our Plan for Change will get Britain building and unlock investment across the UK.\u201d<\/p>\n

Other family-run construction firms also said the changes would change business plans.<\/p>\n

Read our full-length long read about the discontent within construction about the inheritance tax changes: Unhappy families: the impact of new inheritance tax rules<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A family member of one of the industry\u2019s biggest construction firms has accused the government of ignoring warnings over the impact of inheritance tax changes. Wates board member James Wates, who also chairs advocacy group Family Business UK (FBUK), said it lobbied HM Treasury on keeping Business Property Relief (BPR) in the run-up to the …<\/p>\n","protected":false},"author":124451,"featured_media":373862,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[552,565,545],"tags":[],"class_list":["post-512159","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial","category-government","category-wates"],"yoast_head":"\nTreasury ignored inheritance tax warnings, Wates boss reveals | Construction News<\/title>\n<meta name=\"description\" content=\"A family member of one of the industry\u2019s biggest construction firms has accused the government of ignoring warnings over the impact of inheritance tax\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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