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How to Value Your Business for Your Will: UK Guide 2025

· 32 min

Note: The following scenario is fictional and used for illustration.

David built his digital marketing agency from his spare bedroom in 2010 to a £1.2 million business with 12 employees by 2024. When his accountant asked about his will, David froze—he had no idea how to value his business, whether he needed an expensive professional valuation, or how the new £1 million Business Property Relief cap would affect his estate. He'd been putting off his will for three years because the business valuation question felt impossibly complex.

David's situation is common. Only a minority of UK family business owners have an up-to-date will, often because they're overwhelmed by business valuation requirements. With Business Property Relief changes coming in April 2026, accurate business valuation has never been more critical—yet most business owners don't know where to start.

This guide explains exactly how to value your business for UK will and inheritance tax purposes, which valuation method suits your situation, when you need professional help, and how the new £1 million BPR cap affects your planning.

Table of Contents

Why Your Business Valuation Matters for Your Will

Business valuation affects whether your estate exceeds the £325,000 inheritance tax threshold, determines your Business Property Relief eligibility, and establishes fair distribution among beneficiaries.

Getting your business value wrong creates problems that extend far beyond your lifetime.

For business owners, your company often represents your largest single asset. In 2022/23, 31,500 UK estates (4.62% of all deaths) paid inheritance tax, and business assets frequently push estates over the threshold.

Sarah owns 60% of an £800,000 design agency. Without understanding minority discounts, she assumes her shares are worth £480,000. With a typical 25% minority discount, her shares are actually worth £360,000—a £120,000 difference that affects whether her estate exceeds the inheritance tax threshold and how much Business Property Relief she can claim.

Your business valuation matters for five critical reasons:

Inheritance tax calculation. Business value determines whether your estate exceeds the £325,000 nil-rate band. Even a £50,000 valuation error can mean the difference between no inheritance tax and a £20,000 bill.

Business Property Relief claims. From April 2026, accurate valuation becomes even more critical with the new £1 million BPR cap. Undervaluing wastes valuable relief, while overvaluing creates unnecessary tax liability.

Capital Gains Tax for beneficiaries. Your business valuation at death establishes beneficiaries' base cost. If they later sell the business, this affects how much Capital Gains Tax they'll pay.

Family fairness and dispute prevention. James leaves his business to his son who works in it, and £300,000 cash to his daughter. Without accurate valuation, his daughter discovers the business later sold for £500,000—she feels cheated, and family relationships suffer.

Executor protection. Your executor needs a defensible valuation when completing the IHT400 form. HMRC scrutinises business valuations closely, and executors may face personal liability for underpaid tax if the valuation proves incorrect.

According to HMRC guidance, all business valuations must reflect "open market value"—the price a willing buyer would pay in an arm's-length transaction. This isn't what you paid for the business years ago, or what it means to you emotionally, but what a stranger would pay today.

The Three Main Business Valuation Methods for UK Estates

UK business valuations typically use one of three standard approaches: earnings-based, asset-based, or income-based. Your business type determines which method applies.

Most actively trading businesses use earnings multiples—the simplest and most common approach for profitable SMEs.

Earnings-Based Valuation (Profit Multiples)

This method multiplies your adjusted profit by an industry-specific multiple to arrive at a business value.

The process starts with "normalised" earnings—your profit adjusted for unusual items like your high owner salary, one-off costs, or personal expenses run through the business. These adjustments reveal what a new owner would actually earn.

Emma owns a café showing £80,000 profit on last year's accounts. However, she pays herself a £60,000 salary while a manager would cost £35,000. Her normalised profit is £105,000 (£80,000 + £25,000 excess salary). Using a typical 2.5× multiple for local hospitality businesses, her café is worth approximately £262,500.

Industry multiples vary significantly:

  • Local service businesses: 2-3× adjusted profit
  • Professional services: 3-5× adjusted profit
  • SaaS and tech businesses: 5-8× adjusted profit
  • Manufacturing: 3-4× adjusted profit
  • Retail: 2-3× adjusted profit

According to professional valuation guidance, smaller businesses typically attract multiples of 2-4× pre-tax profits, occasionally reaching 5-6× for businesses forecasting very strong growth.

Asset-Based Valuation (Net Asset Value)

When your business assets are worth more than its profits suggest, an asset-based approach makes sense.

This method calculates your business's net asset value: all assets minus all liabilities. Property-rich businesses, investment holdings, or businesses with valuable equipment often suit this approach.

Tom runs a property development business showing £150,000 annual profit. However, his balance sheet shows £1.2 million in development properties, £300,000 in equipment, minus £400,000 in business loans. His net asset value is £1.1 million—significantly higher than an earnings multiple would suggest (£150,000 × 3 = £450,000).

This method requires professional asset revaluation. Book values on balance sheets often don't reflect current market values, especially for property held for many years.

Income-Based Valuation (Discounted Cash Flow)

Less common for SMEs, this sophisticated method projects future cash flows and discounts them to present value.

Rachel owns a SaaS business with £300,000 recurring revenue growing 40% annually. A discounted cash flow analysis projects five years of future cash flows, applies a discount rate reflecting investment risk, and arrives at a present value—typically much higher than simple profit multiples would suggest.

This method typically requires professional valuers due to its complexity.

Which method suits your business?

  • Trading businesses with consistent profits: Earnings-based
  • Property-rich or asset-heavy businesses: Asset-based
  • High-growth or complex businesses: Income-based (professional valuation required)
  • Most SMEs under £1 million: Earnings-based with 2-4× multiple

How Business Property Relief Affects Your Valuation (2026 Changes)

Business Property Relief reduces inheritance tax on qualifying business assets. From April 2026, critical changes make accurate business valuation more important than ever.

Until April 2026, Business Property Relief provides 100% inheritance tax relief on qualifying business assets with no cap. If you own a £2 million qualifying business, your estate pays no inheritance tax on it.

This changes dramatically from 6 April 2026.

The New £1 Million BPR Cap

From April 2026, the government introduces a combined £1 million allowance for Agricultural Property Relief and Business Property Relief together.

The first £1 million of qualifying business assets receives 100% relief. Any value exceeding £1 million receives only 50% relief—meaning 20% effective inheritance tax on the excess.

David's £800,000 digital marketing agency receives full 100% Business Property Relief under both the old and new systems. His estate pays no inheritance tax on the business value. Accurate valuation confirms he's safely under the threshold.

Sarah's £1.5 million consulting business tells a different story. The first £1 million receives 100% relief (no tax). The remaining £500,000 receives 50% relief, leaving £250,000 taxable at 40% inheritance tax = £100,000 tax bill. Before 2026, her family would pay nothing.

Michael's £3 million engineering firm faces significant impact. The first £1 million is tax-free. The remaining £2 million receives 50% relief, leaving £1 million taxable at 40% = £400,000 inheritance tax. Before April 2026, his family would pay nothing.

Why Accurate Valuation Matters More Now

The £1 million threshold makes precision critical. A £100,000 valuation error either way has real consequences:

Undervaluing your £1.1 million business at £950,000 wastes available relief. You claim 100% relief on £950,000 when you could claim it on the full £1 million—missing £50,000 of tax-free allowance.

Overvaluing your £900,000 business at £1.05 million creates unnecessary tax planning complexity and potential tax liability on the fictional excess.

Planning Opportunities Before April 2026

Business owners approaching or exceeding the £1 million threshold should consider:

Lifetime gifts of business shares. Gifts made now benefit from the seven-year taper relief rule. If you survive seven years after gifting business shares, they fall outside your estate entirely.

Spousal transfers. While the £1 million BPR allowance doesn't transfer between spouses like the nil-rate band, restructuring business ownership between spouses can optimise relief.

Business restructuring. Separating trading assets (which qualify for BPR) from investment assets (which don't) may reduce your qualifying business value below the £1 million threshold.

According to the official government guidance, the £1 million threshold will remain frozen until tax year 2029-30, then increase with CPI thereafter.

The transitional rules mean gifts made after 30 October 2024 where the donor dies on or after 6 April 2026 within seven years fall under the new regime.

When You Need a Professional Business Valuation

Not every business requires expensive professional valuation for will-making purposes. Understanding when professional help is essential versus when a reasonable estimate suffices can save you thousands of pounds.

Professional business valuations typically cost £1,500-£15,000 depending on complexity. For many business owners creating their first will, this expense feels prohibitive—and delays will creation indefinitely.

Professional Valuation REQUIRED When

You need qualified, independent valuation from RICS or ICAEW-accredited professionals if:

Your business value exceeds £500,000. Approaching the new £1 million BPR threshold (from April 2026) demands precision. A £50,000 valuation error could cost your estate £20,000 in unnecessary inheritance tax.

Complex ownership structures exist. Multiple shareholders, different share classes, or intricate shareholder agreements require professional expertise to value correctly.

You're planning lifetime gifts or trust arrangements. HMRC scrutinises lifetime business transfers intensely. Professional valuation provides defensible documentation if challenged.

Your business has significant intangible value. Businesses with valuable intellectual property, brand recognition, or customer databases need specialist valuation beyond simple profit multiples.

Your estate might be contentious. If family disputes seem likely, independent professional valuation protects executors and prevents challenges.

Peter owns a £2.5 million engineering firm. He invests £8,000 in a comprehensive RICS valuation. The valuation reveals optimisation opportunities: separating a £600,000 investment property from the trading business reduces his qualifying BPR assets to £1.9 million, saving his family £120,000 in inheritance tax with proper planning.

DIY or Accountant Estimation Acceptable When

You can use rough estimates or your accountant's informal valuation if:

Your business clearly falls under £325,000. If your business won't trigger inheritance tax even combined with other assets, rough estimates suffice for initial will creation.

You operate as a simple sole trader or small partnership. Straightforward structures with no shareholders or complex agreements don't need expensive professional valuations.

You're creating an initial will with plans to update. Start with a reasonable estimate now, then commission formal valuation when approaching retirement or when business value increases significantly.

Your accountant can provide a supportable estimate. Many accountants will provide informal valuations for £500-£1,500—sufficient for straightforward will creation if your estate is under the BPR threshold.

Lucy owns a £200,000 beauty salon. Her accountant provides a rough valuation based on 2.5× normalised profit for £500. She uses this estimate in her WUHLD will, knowing a formal valuation will occur at death when the executor applies for probate.

Professional Valuer Credentials

When you do need professional valuation, ensure your valuer has:

  • RICS (Royal Institution of Chartered Surveyors) accreditation
  • ICAEW (Institute of Chartered Accountants in England and Wales) qualification
  • Specialist business valuation experience in your sector
  • Independence from your business (not your regular accountant who prepared the books)

Typical Professional Valuation Costs

Based on current market rates:

  • Simple business (sole trader, straightforward structure): £1,500-£3,000
  • Medium complexity (limited company, multiple shareholders): £3,000-£7,000
  • Complex business (multiple entities, significant intangibles): £7,000-£15,000+

Compare these costs to potential inheritance tax savings of £50,000-£400,000 for estates above the BPR threshold. Professional valuation is genuine value for money when your estate approaches or exceeds £1 million in business assets.

Valuing Shares vs Valuing the Entire Business

If you own less than 100% of a business, your shares are worth less than a proportional slice of the total business value. Understanding minority discounts prevents significant valuation errors.

Many business owners make a simple but costly mistake: assuming their 30% shareholding in a £1 million business is worth £300,000. It's not.

Whole Business Value vs Share Value

Whole business valuation calculates the value of selling the entire business as a going concern—what a buyer would pay for 100% control. This uses standard earnings multiples, asset values, or discounted cash flows.

Share valuation applies discounts to reflect the reduced value of minority stakes. Two discounts typically apply: lack of control and lack of marketability.

The Minority Discount

Minority shareholders cannot control business decisions. They can't force dividends, initiate a sale, or determine strategy. This lack of control reduces share value significantly.

Professional valuation guidance indicates minority discounts typically range from 20-40% for small shareholdings, though specific circumstances can push this higher or lower.

James owns 100% of a £1.2 million consultancy. His business value equals £1.2 million with no discounts.

Sarah owns 30% of the same £1.2 million business. Her proportional value would be £360,000. However, with a 30% minority discount (reflecting her inability to control the business), her shares are valued at approximately £252,000—£108,000 less than a simple proportional calculation suggests.

Tom owns 15% with a restrictive shareholder agreement preventing share sales without approval. His proportional value is £180,000, but after applying minority and marketability discounts totalling 50%, his shares may be valued at only £90,000.

The Marketability Discount

Private company shares are difficult to sell. Unlike publicly traded shares, no ready market exists. Selling often requires finding specific buyers who meet shareholder agreement criteria, which further depresses value.

Marketability discounts typically add another 10-30% reduction on top of minority discounts, though these may overlap rather than compound.

When Discounts Apply (and Don't Apply)

Minority discounts DON'T apply when:

  • You own 100% of the business
  • You own 50% or more and can block major decisions
  • Your shareholder agreement values shares at proportional value
  • You're valuing the business as a single unit for Business Property Relief purposes

Minority discounts DO apply when:

  • You own less than 50% without blocking rights
  • No shareholder agreement specifies valuation methodology
  • Shares are being left to different beneficiaries individually
  • Valuing shares for inheritance tax after death

Shareholder Agreement Impact

Many shareholder agreements include specific valuation formulas that override market value for internal transfers. These might specify:

  • Book value (balance sheet net assets)
  • Formula based on recent profit multiples
  • Independent accountant's valuation
  • Pre-agreed fixed price updated annually

Check your shareholder agreement carefully. If it specifies a valuation method for death or exit, this typically takes precedence for will planning purposes—though HMRC may still challenge the methodology for inheritance tax.

Practical Example

Emma's graphic design business is worth £900,000 as a whole. Three shareholders own it:

  • Emma: 60% = £540,000 (controlling stake, minimal discount)
  • Her business partner: 30% = £270,000 × 70% (after 30% minority discount) = £189,000
  • Inactive investor: 10% = £90,000 × 60% (after 40% minority discount for very small stake) = £54,000

Total individual share values (£783,000) are less than the whole business value (£900,000) because minority positions are inherently less valuable than proportional ownership suggests.

For inheritance tax and will purposes, Emma leaves her 60% to her daughter. The valuation uses £540,000 (controlling stake), while her partner's 30% would be valued at only £189,000 despite being half the size of Emma's holding.

HMRC's Business Valuation Requirements and Red Flags

HMRC scrutinises business valuations intensely. Understanding their requirements and what triggers challenges helps you avoid delays, disputes, and penalties.

When your executor submits the IHT400 inheritance tax form after your death, business valuations receive particular attention—especially for high-value estates or Business Property Relief claims.

HMRC's Valuation Standard

HMRC requires all business valuations to reflect "open market value"—the price a hypothetical willing buyer would pay a hypothetical willing seller in an arm's-length transaction on the date of death.

This isn't what you paid for the business years ago, what you'd like it to be worth, or what it might sell for in ideal circumstances. It's what a realistic buyer would actually pay on the specific date of death.

Crucially, HMRC doesn't accept hindsight. If your business sells six months after death for £1.5 million, but conditions deteriorated immediately before death reducing value to £1.2 million, the correct valuation is £1.2 million—even though it seems to contradict the later sale price.

What HMRC Requires

When reviewing business valuations, HMRC expects:

Detailed valuation report with methodology. Simply stating "business worth £X" won't survive scrutiny. HMRC wants to see which method you used (earnings, assets, income), why that method suits your business, and detailed calculations.

Comparable transaction evidence. If you claim your £800,000 business is typical for your sector, provide evidence of similar businesses sold recently with comparable multiples.

Financial statements for 3-5 years. HMRC wants to see profit trends, balance sheets, and whether the business was growing or declining before death.

Explanation of adjustments. If you've adjusted profits for one-off items or normalised owner salary, document every adjustment with justification.

Justification for discounts. Applying a 30% minority discount? HMRC wants to know why 30% specifically, with reference to comparable situations or professional guidance.

Valuer's qualifications and independence. Who prepared the valuation? What are their credentials? Do they have a financial interest in understating the value?

HMRC Red Flags That Trigger Challenges

Certain valuation approaches almost guarantee HMRC challenge:

Valuation significantly below industry norms. If similar businesses sell for 4× profit and you claim 2× profit, HMRC will ask why your business is worth half the industry standard.

DIY valuation for businesses over £500,000. Self-prepared valuations for high-value businesses lack credibility. HMRC will request professional independent valuation.

Related party valuations. Your brother-in-law who's an accountant preparing the valuation creates independence questions.

Lack of supporting documentation. Claiming a value without profit multiples, comparable transactions, or professional opinion invites challenge.

Inconsistency with previous valuations. If you valued shares at £600,000 for EMI share options three years ago, claiming £300,000 at death needs compelling explanation.

Business sold soon after death for substantially different price. Selling the business for £1.2 million nine months after death when you claimed £800,000 value raises obvious questions.

Unexplained large discounts. Applying 60% total discounts for minority holdings without detailed justification.

How HMRC Challenges Work

When HMRC questions your business valuation:

  1. Your executor submits IHT400 with business valuation
  2. HMRC reviews for reasonableness and consistency
  3. HMRC may request additional evidence or full valuation report
  4. If unconvinced, HMRC can commission independent valuation
  5. Dispute resolution takes 6-18 months typically
  6. Interest accrues on any additional tax from date of death
  7. Penalties may apply for careless or deliberate undervaluation

An executor valued a £1.5 million business at £800,000 using a rough estimate without professional support. HMRC challenged, commissioned independent valuation at £1.4 million, and assessed £240,000 additional inheritance tax plus £30,000 penalty for careless error plus interest from date of death. The dispute delayed probate for 14 months.

Contrast this with an executor who commissioned professional RICS valuation for £6,000, producing a comprehensive 40-page report valuing the business at £1.2 million. HMRC accepted the valuation without challenge, and probate completed in six months.

Penalties for Undervaluation

Getting business valuation wrong can be expensive:

  • Careless error: Up to 30% penalty on underpaid tax
  • Deliberate undervaluation: Up to 70% penalty on underpaid tax
  • Deliberate and concealed: Up to 100% penalty on underpaid tax
  • Plus interest calculated from date of death until payment

The penalty applies to the additional tax, not the undervaluation amount. If you undervalue by £200,000, creating £80,000 underpaid tax (at 40% IHT), a 30% careless error penalty adds £24,000.

Protection Strategies

Reduce HMRC challenge risk by:

  • Using qualified, independent professional valuers (RICS or ICAEW accredited)
  • Documenting methodology thoroughly with comparable evidence
  • Providing detailed financial statements and trend analysis
  • Explaining all adjustments and discounts with justification
  • Updating valuations when significant business changes occur
  • Considering advance clearance for particularly complex valuations

Professional valuation isn't legally required for all estates, but it's the single most effective way to prevent HMRC challenges, executor stress, and beneficiary uncertainty.

Common Business Valuation Mistakes to Avoid

Business owners make predictable valuation errors. Recognising these mistakes helps you avoid costly problems for your estate and family.

Mistake 1: Using Purchase Price from Years Ago

The £300,000 you paid for your business in 2015 tells you nothing about its value today.

Businesses grow, decline, and change. Market conditions shift. Competitors emerge. Technology disrupts entire sectors.

David bought his recruitment business for £400,000 in 2018. By 2024, he'd grown it to £1.1 million value through sustained client base expansion. Using his 2018 purchase price would undervalue the business by £700,000—creating significant inheritance tax underpayment risk.

Conversely, Sarah bought her events business for £600,000 in 2019. The pandemic devastated her sector. By 2024, realistic market value had fallen to £250,000. Using her purchase price would overstate value by £350,000.

Fix: Get current valuation based on today's profit, assets, and market conditions—not historical cost.

Mistake 2: Forgetting to Adjust for Personal Expenses

Many business owners run personal expenses through their business: high owner salary, personal vehicle, family holidays disguised as client entertainment.

These inflate business costs and depress apparent profit. For valuation purposes, you need "normalised" profit showing what a new owner would actually earn.

Emma's café shows £60,000 profit on accounts. However, she pays herself a £55,000 salary while a manager would cost £30,000. She also runs her £15,000 Range Rover through the business though a £5,000 van would suffice.

Normalised profit: £60,000 + £25,000 excess salary + £10,000 excess vehicle = £95,000

Valuation at 2.5× multiple: £237,500 (vs £150,000 using unadjusted profit)

Fix: Work with your accountant to calculate normalised, maintainable earnings before applying valuation multiples.

Mistake 3: Confusing Personal Goodwill with Business Goodwill

Some businesses have value that transfers to a new owner (business goodwill). Others have value tied specifically to you (personal goodwill) that dies when you do.

This particularly affects professionals: dentists, consultants, solicitors, doctors in private practice.

Tom runs a management consulting practice generating £500,000 revenue and £180,000 profit. However, all clients have personal relationships with Tom. If Tom dies, clients would likely leave rather than work with a replacement consultant.

Tom's business has minimal transferable value—perhaps £50,000 for client lists and intellectual property, but not the £540,000 that a 3× profit multiple would suggest. The goodwill is personal, not business.

Contrast this with Emma's chain of three coffee shops. Customers come for the location and product, not Emma personally. The business has genuine transferable goodwill worth the full earnings multiple.

Fix: Honestly assess whether your business value depends on you personally. Professional practices often have much lower transferable value than earnings multiples suggest.

Mistake 4: Ignoring Shareholder Agreement Valuation Clauses

Many shareholder agreements specify exactly how shares must be valued on death or exit—often at book value or using specific formulas.

James owns 40% of a business with market value of £1.2 million (£480,000 proportional value). However, his shareholder agreement requires shares to be valued at book value on death—currently £300,000 total (£120,000 for his 40%).

For inheritance tax purposes, the shareholder agreement valuation may override market value. Using £480,000 in his will when the agreement specifies £120,000 creates a £360,000 discrepancy.

Fix: Review your shareholder agreement carefully. If it contains valuation clauses, these typically determine value for will purposes.

Mistake 5: Not Separating Business and Personal Assets

Many business owners hold personal assets in their business structure: investment properties, personal vehicles, valuable art in the office.

These distort business valuation and may affect Business Property Relief eligibility.

Sarah's "£1.5 million business" actually comprises:

  • £800,000 trading business (qualifies for BPR)
  • £700,000 investment property held in the company (doesn't qualify for BPR)

For inheritance tax purposes, only £800,000 qualifies for Business Property Relief. The £700,000 property faces full 40% inheritance tax unless removed from the business structure.

Fix: Separate true business assets from personal or investment assets held in business structures. Only qualifying business assets receive BPR.

Mistake 6: Using Outdated Valuations

A business valuation from five years ago is worthless for current estate planning.

Business values change constantly—especially in volatile sectors like technology, retail, or hospitality.

Michael commissioned a professional £1.2 million valuation in 2019 for his restaurant business. He hasn't updated it. The pandemic decimated hospitality values. Current realistic value: £400,000.

His will still references the £1.2 million valuation, creating an £800,000 overstatement that will need correcting at death—causing family confusion and potential disputes.

Fix: Update business valuations every 3-5 years minimum, or whenever significant changes occur (major client wins/losses, acquisitions, market shifts, structural changes).

Mistake 7: Not Considering Business Debts and Liabilities

Business value equals assets minus liabilities. Outstanding loans, director's loan accounts, and pending litigation all reduce net value.

David's business shows £1.2 million in assets. However:

  • £400,000 in business loans
  • £100,000 director's loan account (money he owes the business)
  • £50,000 pending legal claim

Net business value: £1.2 million - £550,000 = £650,000

Using the gross £1.2 million figure overstates value by £550,000.

Fix: Calculate net value after all liabilities, not gross asset value.

Mistake 8: Overvaluing Based on Emotional Attachment

"I built this from nothing—it's worth millions to me."

Emotional attachment and personal pride inflate perceived value. Market value equals what a stranger would pay, not what the business means to you.

Tom believes his printing business is worth £2 million because he's invested 30 years building it. Market comparables show similar businesses selling for 2.5× profit. His £250,000 profit × 2.5 = £625,000 realistic market value.

His emotional valuation creates a £1.375 million discrepancy that his family will discover painfully when they try to sell after his death and receive offers around £600,000-£650,000.

Fix: Use objective market-based valuation methods, not emotional attachment. What would a buyer who doesn't know you actually pay?

How to Update Your Will as Your Business Value Changes

Business values fluctuate constantly. Your will needs updating to reflect these changes—but traditional solicitor costs deter regular reviews.

Most business owners make a will once, then never update it despite significant business value changes. This creates growing discrepancies between will provisions and reality.

Why Business Value Changes

Your business value shifts due to:

Business performance. Profit increases or decreases directly affect earnings-based valuations. A 20% profit increase means 20% higher valuation.

Market conditions. Sector booms and busts affect industry multiples. Tech businesses commanded 6-8× multiples in 2021, dropping to 3-4× by 2023.

Competition and market shifts. New competitors, regulatory changes, or technology disruption can reduce business value dramatically.

Major transactions. Acquiring another business, disposing of a division, or winning/losing key clients changes value substantially.

Structural changes. New shareholders, reorganisation, or conversion from sole trader to limited company all affect valuation.

When to Update Your Will

Review and potentially update your will when:

Business value changes by 20% or more. Significant increases or decreases warrant updated will provisions to maintain fair distribution.

Business structure changes. New shareholders, share classes, or reorganisation require will updates.

You approach the £1 million BPR threshold. From April 2026, crossing this threshold has major inheritance tax implications worth capturing in updated will provisions.

Major business events occur. Acquisitions, disposals, or sale of the business all require immediate will updates.

Every 3-5 years as general practice. Even without major changes, regular reviews ensure your will remains current.

David's consulting business grew from £600,000 in 2020 to £1.05 million by 2024. His will leaves the business to his son and "equivalent value in cash and property" to his daughter. Without updating the will to reflect the new value, his daughter should receive £1.05 million equivalent—but the will still references the old £600,000 amount, creating potential disputes.

Traditional Solicitor Approach Creates Barriers

Updating wills with traditional solicitors costs £150-£300 per update. This requires:

  • Booking appointments (2-4 week delays)
  • Travel to solicitor offices
  • Multiple rounds of drafting and review
  • £150-£300 payment each time

These barriers deter regular updates. Most business owners think "I'll update it when I have time" and never do—leaving outdated wills that no longer reflect current business reality.

WUHLD Makes Updates Simple and Affordable

WUHLD's online platform allows business owners to update wills as business circumstances change:

  • Update online in 15 minutes from home
  • Same £99.99 cost (vs £150-£300 per solicitor update)
  • No appointments or delays
  • Preview all changes before paying
  • Download updated will immediately

Emma revalues her graphic design business annually. Each January, she updates her WUHLD will with the new value, adjusting distribution provisions to maintain fairness between her two children. The 15-minute annual update ensures her will always reflects current reality.

This approach encourages best practice: keeping wills current rather than leaving them to fossilise for years.

How to Track Business Value

You don't need expensive annual professional valuations. Instead:

Annual accountant's estimate. Most accountants will provide rough valuations for £300-£500 based on latest accounts and current industry multiples.

Track key metrics. Monitor profit trends and industry multiple changes. If profit increases 30% and multiples are stable, value has increased approximately 30%.

Formal valuation every 3-5 years. Commission professional RICS or ICAEW valuation every few years to benchmark your informal estimates.

Set trigger points. Decide in advance: "If business value changes by £100,000 or more, I'll update my will." This removes procrastination.

What Else to Update When Business Value Changes

Business value changes often require updating:

Executor instructions. Higher value estates may need co-executors or professional executor involvement.

Guardian provisions. If business income supports children, changes affect financial provision for guardians.

Trust arrangements. Business value exceeding BPR thresholds may warrant trust structures.

Specific succession instructions. Employees or co-shareholders may need different arrangements as business grows.

Life insurance provisions. You may need additional life insurance to equalise inheritance between children when one inherits the business.

With WUHLD, updating all these elements takes 15 minutes online. You can make comprehensive changes reflecting your business's current reality without the delays and costs that prevent most business owners from keeping wills current.

Your business changes constantly. Your will should too.

Creating Your Will When You Own a Business

Business ownership adds complexity to will creation, but understanding five key decisions helps you create a comprehensive, effective will.

Most business owners delay making wills because they find business-related decisions overwhelming. Breaking the process into specific components makes it manageable.

Decision 1: Who Inherits the Business?

You have several options:

Specific beneficiary active in the business. "I leave my entire business to my daughter Emma, who currently works as Operations Director."

Multiple beneficiaries with equal shares. "I leave my 60% shareholding in the business to be divided equally between my three children."

Surviving spouse or partner. "I leave my business to my wife absolutely."

Trust arrangement. "I leave my business to trustees to hold for my children until the youngest reaches age 25."

Sale instruction. "I instruct my executors to sell my business and distribute proceeds equally among my four nephews."

Each option suits different circumstances. Consider whether beneficiaries want to run the business, have necessary skills, and whether keeping the business intact makes sense.

Decision 2: Who Should Be Executor?

Business estates need executors with commercial awareness.

James appoints his business-savvy sister and his accountant as co-executors. His sister understands family dynamics, while his accountant brings financial expertise and objectivity for business decisions during probate.

Key executor considerations:

  • Business knowledge (understands your sector)
  • Practical ability to manage business during probate
  • No conflict of interest (cannot be sole executor if inheriting the business)
  • Willingness to serve (some people decline executorship)
  • Professional alternative if family lacks business skills

Decision 3: Business Succession Planning

Your will should address:

Continue trading or sell? Do you want executors to continue running the business until beneficiaries are ready, or sell it quickly and distribute cash?

Management during probate. Who runs the business during the 6-12 months probate typically takes? Name specific managers or grant executor authority to appoint interim management.

Key person insurance. Life insurance can fund inheritance tax bills without forcing business sale. This protects business continuity for beneficiaries.

Buy-sell agreements. If you have co-shareholders, formal buy-sell agreements funded by life insurance ensure smooth transitions.

Decision 4: Equalising Inheritance

Leaving the business to one child while being fair to others requires planning.

Sarah's business is worth £800,000. She has two children: her son works in the business and should inherit it, but her daughter should receive equivalent value.

Sarah's will: "I leave my business to my son David. I leave my property portfolio worth £800,000 to my daughter Emma."

This achieves fairness, but only if the valuations are accurate. If Sarah's business later sells for £1.2 million, Emma may feel cheated.

Better approach: "I leave my business to David and property worth equivalent value to Emma, as determined by my executors using professional valuations at the date of my death."

Alternatively, life insurance can equalise: £800,000 business to son, £800,000 life insurance proceeds to daughter.

Decision 5: Information for Your Executor

Leave comprehensive information helping executors value and manage your business:

  • Recent valuation report (if you have one)
  • Business accountant contact details
  • Shareholder agreement copies
  • Key business contacts (co-shareholders, major clients, key suppliers)
  • Business succession plan document
  • Life insurance policy details and location
  • Business bank account details
  • Location of business records and passwords

This prevents executors stumbling in the dark trying to understand your business after your death.

Common Will Structures for Business Owners

Simple sole trader: "I leave my entire business known as [trading name], including all business assets, goodwill, and client relationships, to my son David."

Equal shareholding split: "I leave my 40% shareholding in [Company Name] to be divided equally between my two daughters, Emma and Sarah, in equal shares absolutely."

Sale instruction: "I instruct my executors to sell my business and distribute the net proceeds equally among my three children."

Trust for minors: "I leave my business to my trustees to hold for my children until they each reach age 25, at which point the trustees shall transfer equal shares to each child."

When Online Will Works (WUHLD)

WUHLD's online will service suits business owners with:

  • Sole trader or straightforward partnership structures
  • Clear succession plans (who inherits is decided)
  • Business value under £1 million
  • Simple ownership (no complex shareholder agreements)
  • Complementary assets allowing equal distribution

Tom runs a £400,000 plumbing business as a sole trader. He wants to leave it to his son who works with him, and leave his £400,000 property to his daughter. WUHLD's straightforward platform allows him to document these wishes clearly in 15 minutes for £99.99.

When to Consider Solicitor Help

More complex situations may warrant solicitor involvement:

  • Multiple shareholders with intricate shareholder agreements
  • Business value significantly exceeds all other assets (creates distribution challenges)
  • International business interests
  • Family disputes seem likely
  • Complex trust arrangements needed
  • Business structure involves multiple entities

Even complex situations often benefit from starting with a WUHLD will documenting basic intentions, then consulting a solicitor for refinement if needed.

Key takeaways:

  • Business valuation affects inheritance tax, Business Property Relief claims, and family fairness
  • Three main methods exist: earnings-based (profit multiples), asset-based (net assets), income-based (discounted cash flow)
  • April 2026 brings £1 million BPR cap making accurate valuation more critical than ever
  • Professional valuation recommended for businesses over £500,000 or complex structures
  • Update your will every 3-5 years or when business value changes by 20%+

Your business represents years of hard work, risk-taking, and dedication. Ensuring it's properly valued and accounted for in your will protects both your legacy and your family's financial future.

Whether your business is worth £200,000 or £2 million, having clear instructions prevents family disputes and ensures your wishes are followed. With the new £1 million BPR cap coming in April 2026, business owners can no longer afford to delay their estate planning.

Create your will today and include your business valuation—even if it's a rough estimate you'll refine later. With WUHLD, it takes just 15 minutes online.

For £99.99 (vs £650+ for a solicitor), you'll get:

  • Your complete, legally binding will with business succession instructions
  • A 12-page Testator Guide covering business valuation considerations
  • A Witness Guide for proper execution
  • A Complete Asset Inventory document for tracking business value changes
  • Easy online updates as your business value changes

You can preview your entire will free before paying anything, and update it anytime your business circumstances change.

Preview Your Will Free – No Payment Required

Legal Disclaimer:

This article provides general information only and does not constitute legal or financial advice. WUHLD is not a law firm and does not provide legal advice. Laws and guidance change and their application depends on your circumstances. For advice about your situation, consult a qualified solicitor or regulated professional. Unless stated otherwise, information relates to England and Wales.

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