Increasing numbers of family-owned businesses contribute to economy

17/10/2007  11:33:35

Family businesses make up a very significant and largely under-appreciated contribution to the UK economy, according to the International Centre for Families in Business.

The future of company formation in the UK lies in "intergenerational succession", within increasing numbers of people passing down their businesses to family members.

Research by Tenon Forum indicates that almost 60 per cent of British entrepreneurs involve one or more family members in their business in some capacity. Over a third of these are official employees and 13 per cent are investors.

Almost a quarter of owner managers or company directors intend to pass their business down the line, while 14 per cent had inherited their company.

Nick Smith, a partner with Veale Wasborough Lawyers, which works with the International Centre for Families in Business said that "an enormous number are passing ownership by intergenerational succession," and while inheritance tax is still a fairly complicated issue, there is "fairly favourable treatment for passing on business assets".

"The kinds of family businesses go from brewers to funeral directors, along with farming, hotels, waste disposal companies," Mr Smith said.

He added: "As we live and breathe, the economy has thousands of business assets that are in the process of passing from one generation to the next."

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