Business Succession Planning
Ensure your business can continue and ownership can transfer smoothly — whatever happens.
Most business owners spend years building something valuable. But without a succession plan, the death or serious illness of a key person can leave the business in chaos — with ownership disputes, forced sales, and financial instability threatening everything that has been built. Business succession planning combines the right insurance products with the right legal structures to ensure the business can continue and ownership can transfer fairly and efficiently, whatever happens.
What is Business Succession Planning?
Business succession planning is the process of preparing for the transfer of business ownership and control — whether triggered by the death of a shareholder, a serious illness, retirement, or a planned exit. It involves a combination of legal structures (such as shareholder agreements and Cross Option Agreements), financial planning, and insurance products (such as Shareholder Protection, Key Person Insurance, and Business Loan Protection) working together. The insurance element ensures the funds are available to buy out a departing owner's shares at a fair value — without the surviving owners having to find the money personally or the business having to take on debt. We focus on the insurance component of succession planning and work alongside your solicitor and accountant to ensure the overall plan is structured correctly.
Who is it suitable for?
Key Benefits
Tax Considerations
Business succession planning can involve significant tax considerations. Business Property Relief (BPR) can reduce or eliminate inheritance tax on qualifying business assets — including shares in trading companies — which is a key reason why succession planning should be done proactively rather than reactively. Capital Gains Tax may arise on share transfers, depending on the structure. The tax treatment of insurance payouts depends on the type of policy and its purpose. A well-structured succession plan — combining the right insurance with the right legal and tax structures — can significantly reduce the overall tax burden on the business and its owners. We work alongside your accountant and solicitor to ensure the plan is structured correctly. Tax treatment depends on individual and business circumstances and may be subject to change.
Tax treatment depends on individual circumstances and may be subject to change. We recommend seeking independent tax advice.
Real-World Examples
Two-director company — no plan in place
Two directors of a successful business have no succession plan. One director dies unexpectedly. His 50% shareholding passes to his estate — and ultimately to his spouse, who has no involvement in the business. The surviving director now has a business partner they did not choose, with no mechanism to buy out the shares. A Cross Option Agreement backed by Shareholder Protection would have given both parties a clear, funded exit route.
Shareholder Protection — funded buyout
Two directors arrange Shareholder Protection alongside a Cross Option Agreement. Each director's policy is written in trust for the other. If either director dies, the surviving director receives the policy payout and uses it to buy the deceased's shares from the estate at a pre-agreed fair value. The business continues without disruption. The deceased's family receives a fair price for the shares.
Family business — generational transfer
A family business owner wants to pass the business to their children on retirement. A succession plan is put in place, including a whole of life policy written in trust to cover the anticipated inheritance tax liability on the business. The business qualifies for Business Property Relief, reducing the IHT exposure significantly. The plan ensures the business can be transferred without the need to sell assets to fund the tax bill.
Retiring director — funded exit
A director approaching retirement wants to ensure their shares can be bought out by the remaining directors at a fair value. A combination of Shareholder Protection and a formal buy-sell agreement provides a clear, funded exit route. The remaining directors know exactly how the buyout will be funded; the retiring director knows they will receive fair value for their shares.
Frequently Asked Questions
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Find out if your business protection is adequate, correctly structured, and as tax-efficient as it could be.
Why Choose JK Insurance Brokers?
- Whole-of-market access — all leading insurers
- FCA authorised & regulated (FRN 1047042)
- No broker fees — ever
- Business protection specialists
- Personal, one-to-one service with Tom Dobbe
- UK-wide advice by phone or video call
- Ongoing reviews as your business grows
Speak Directly to Tom
I help company directors and business owners protect their families, shareholders and businesses.
01737 333249[email protected]