The chancellor John Healey is reportedly considering the announcement of new rules in the Budget on 28 October that might lead to an income tax charge arising in arrangements involving the transfer of a family business from one generation to the next. Understandably, that would be troubling to many business owners considering their retirement and succession plans.

This isn’t your typical pre-Budget speculation. We already have a lot of the detail as HMRC openly consulted on changing certain tax rules relating to distributions from companies over the summer. If HMRC implement these changes, they could indeed lead to higher tax costs for some business succession plans.

What is important to note however is that legitimate succession plans are not the real target of these proposed tax rule changes. HMRC’s consultation makes clear the mischief they are trying to address.