More than one in five family-owned manufacturing companies in the UK are considering selling to overseas buyers because of recent changes to inheritance tax, according to new research from Make UK and accountancy firm Bishop Fleming.
The survey, conducted among manufacturers in May and June 2026, found that 22% of family-owned manufacturers were considering a sale to an international buyer. A further 18% were weighing a sale to another UK company.
The findings highlight concerns among family businesses about the impact of changes to inheritance tax on succession planning. Almost four in five family-owned manufacturers, or 78%, said they were worried about the reforms and how they could affect the future ownership of their companies.
The 2024 Budget changed inheritance tax rules to bring more business and agricultural assets within its scope. Business property relief was also reduced, with the changes taking effect from April 2026.
Family-owned companies represented 65% of businesses surveyed by Make UK and Bishop Fleming. Of those, 89% were managed by members of the same family.
The report estimated that family-owned manufacturers contribute around £94bn to the UK economy and support approximately one million jobs.
Researchers warned that inheritance tax pressures could influence commercial decisions, with some companies potentially changing ownership structures, delaying investment or selling to third parties to manage future tax liabilities.
Fhaheen Khan, senior economist at Make UK, said reducing energy costs and reviewing the inheritance tax changes were important to securing Britain’s manufacturing base.
He also called for stronger apprenticeship funding and practical support through the government’s Industrial Strategy, arguing that family-owned manufacturers play an important role in supporting skilled employment and long-term investment.
Energy costs were the biggest barrier to growth among manufacturers generally, with 59% of respondents identifying them as a major concern. The report said UK industrial electricity prices were the highest among G7 nations, while 90% of manufacturers had experienced higher energy costs since 2022.
Economic uncertainty was cited by 53% of respondents, while 47% identified taxation as a barrier to growth.
Neil Davy, chief executive of Family Business UK, said the research showed that changes to business property relief were affecting family-owned companies and their succession plans.
The government has defended the reforms, saying they are intended to ensure the tax system remains fair while giving businesses room to invest and grow. It said the changes would affect around 2,000 estates each year.
In December 2025, the government raised the combined relief threshold to £2.5m for qualifying businesses and farms before the new rules came into force on 6 April 2026.
The Treasury also pointed to measures including business rates reductions, a corporation tax cap, increased access to finance for small businesses and action on late payments as part of its wider support for companies.
