Family businesses make a large contribution to the national economy and should be encouraged, according to one expert.
The International Centre for Families in Business said this week that often the financial input of family firms is under-valued but that the inheritance tax system looks favourably upon them.
Nick Smith, a partner with Veale Wasborough Lawyers who work with the ICFB, said that nearly half of workers in the UK were employed by such companies and that the sector should not be overlooked.
"The kinds of family businesses go from brewers to funeral directors, along with farming, hotels, waste disposal companies," he said.
He added that one of the incentives for passing a business down from generation to generation was the ability to reduce levels of inheritance tax.
"[Inheritance tax is] a complicated issue but broadly speaking there is fairly favourable treatment for passing on business assets from one generation to the next," he concluded.
A study conducted by Tenon Forum recently found that 14 per cent of business owners in the UK said they had inherited their company.
