Why the UK Tax System Could Destroy Family-Owned Wine Businesses

Tony Cleary MBE

We've spent nearly five decades building Lanchester Group, starting Lanchester Wines from our front room back in 1980. We've invested in people, assets and long-term thinking; we've weathered recessions, political changes and supply chain chaos. But nothing has felt more threatening to the future of our business than the proposed changes to Inheritance Tax (IHT).

This is absolutely critical right now. We're currently trying to understand and challenge the government's proposed changes to Inheritance Tax (IHT). From April 2026, Business Property Relief (BPR) will be capped at £1 million; anything above that will only get 50% IHT relief.

Thus, if a business is sold, tax should be paid, we understand that. But we're passing on the business to the next generation, no money is changing hands, it's just the assets that move on within the family and the money remains tied up in these business assets, not in our pockets. IHT should be on money you've actually got. Even if we sell assets or the business to pay it, we'd face Capital Gains Tax before we even get to the IHT bill. It's tax on tax.

Ultimately, IHT is calculated based on the business's value the day before someone dies. That's neither realistic nor fair, especially since the value can collapse overnight without a succession plan. I've never known a Government so anti-business and to quote Sir James Dyson, this is "a war on aspiration which is undermining our future prosperity."

Meanwhile, Veronica and I are getting older. Both Reform UK and the Conservative Party have pledged to remove this tax, but while we hope to outlast the current Government, nothing is guaranteed. We've protected this company and its 600 jobs for decades, and this legislation risks wiping it out. This is very short-term thinking.

And, in all honesty, this keeps me awake at night more than anything else over the past 45 years.



Caroline Cleary

This is a huge threat to the entire economy. It doesn't just affect farmers - it affects every UK private family business. Over 15 million people in the UK work for family businesses, which is more than half of all private-sector jobs. And, of course, the majority of the UK wine trade is privately owned family businesses of varying size.

So we've done the maths; assuming the business is valued at £100 million and it passes to the next generation, the IHT bill could be close to £20 millionii. And, we'd be expected to pay that within six months, or over ten years at 8.25% interest. That's tens of millions of pounds drained from the business simply to keep it operating. My entire first decade in charge would be spent working for the Government rather than the good of the company and our people.

Of course, this isn't about avoiding tax. We already contribute significantly - we've calculated that the wine packed at Greencroft Bottling last financial year was responsible for over £600,000,000 in Alcohol Duty and VAT.

Another major issue, meanwhile, is the change to pensions. From age 75, pension funds over £1 million will be taxed at around 68%, a devastating blow for family businesses who have sensibly invested pension savings into their own business property. This risks forcing owners to sell key assets just to meet tax demands, threatening the viability of the business itself."

What we need is clarity. We need fairness. Most of all, we need a tax system that recognises the value of keeping great businesses in family hands, for the benefit of everyone they support; within each family business, the term 'family' extends to everyone who works there. This ridiculous legislation must be overturned, or many family-owned businesses could disappear.