This year's Autumn Budget introduces a significant recalibration of wealth taxation in the UK. From caps on inheritance tax reliefs and tighter restrictions on lifetime gifting, to the reclassification of pensions under inheritance tax and the re-emergence of wealth tax discussions, the message is clear: families with substantial capital holdings must now contend with a more aggressive fiscal landscape. Concurrently, frozen income tax thresholds continue to edge more individuals into higher tax bands without any real increase in income.
For high-net-worth families, these measures are more than mere inconvenience. They represent a direct threat to the long-term sustainability of capital built over generations. Conventional planning tools—personal ownership, traditional trusts, and intergenerational gifting—are becoming less effective, and in many cases, dangerously rigid.
Over the past 18 months, I’ve engaged with families across the country seeking clarity in this uncertain climate. The recurring concern is universal: "How do we preserve value and maintain control under this new tax regime?"
The answer lies in adopting structural resilience through the Self-Administered Family Office (SAFO). The SAFO is no longer a niche concept for ultra-high-net-worth families—it is increasingly becoming the structural foundation for intergenerational wealth preservation among entrepreneurial, asset-rich households who see tax as a strategic consideration, not just a compliance burden.
Why Traditional Structures Are Losing Relevance
Legacy strategies are struggling to keep pace with the speed and complexity of tax reforms. What worked even five years ago now risks being obsolete.
Personal ownership now entails full exposure to inheritance tax. As relief caps tighten, particularly on business and agricultural property, even historically protected assets are vulnerable. The removal of reliefs that previously underpinned multi-generational planning has left many estates scrambling to reassess their risk exposure. The equity in a family business or agricultural land, which may once have been seen as safe, is now a potential tax liability.
Trusts, while once invaluable, now present notable inefficiencies. With 20% entry charges, ten-year anniversary charges, and rigid accumulation rules, their effectiveness is increasingly constrained. One client, having relied on a trust structure established in 2008, found themselves encumbered by administrative burdens and diminishing returns by 2023. Adjusting to recent gifting restrictions and evolving IHT thresholds created a tax drag that nearly offset the original purpose of the trust.
Moreover, HMRC scrutiny of trusts has intensified. Reporting requirements have increased, and the public sentiment toward trusts has shifted. Transparency obligations and the erosion of tax benefits mean that for many families, trusts are no longer the default solution.
Liquidity constraints are becoming critical. Estates concentrated in illiquid assets such as property, land, or private company shares may be forced to sell under unfavourable conditions simply to meet tax liabilities. We recently advised a family who nearly lost a core property portfolio when business relief eligibility was unexpectedly denied. This example is increasingly common, as more reliefs are redefined or narrowed in scope.
The conclusion is clear: traditional methods no longer offer the flexibility or control that modern estate planning requires. What’s needed is a structure that responds dynamically to tax pressures while supporting active ownership and governance.
The SAFO Advantage: Flexibility and Control
A SAFO places family assets within a bespoke holding company, utilising a class-based share structure to deliver strategic control.
This framework separates control (via voting shares) from economic value (via freezer, growth, or alphabet shares). Founders retain strategic oversight while directing value to trusts or future generations in a tax-efficient manner.
This structure allows families to:
Freeze the present value of assets, limiting exposure to inheritance tax.
Transfer future growth outside the estate without triggering immediate tax liabilities.
Allocate income to lower-rate taxpayers within the family, optimising income tax treatment.
One family recently repositioned £20 million in diversified assets under a SAFO. The outcome? A tax exposure reduction in the millions over a decade, without compromising control or governance. Their treasury team now operates with far greater agility, reinvesting surplus cash into diversified assets, while retaining liquidity for upcoming generational transitions.
A SAFO is not a silver bullet, but it introduces resilience by embedding governance and long-term planning into a structure capable of withstanding legislative change. That alone positions it far above conventional planning tools.
Furthermore, the SAFO encourages long-term alignment between wealth holders and wealth recipients. Rather than treating succession as a cliff-edge event triggered by mortality, the SAFO allows for gradual, strategic transition. That is a mindset shift—one that turns succession from an emergency plan into a governance opportunity.
Addressing Autumn Budget 2025 Through SAFO Structuring
The SAFO is designed to respond nimbly to the specific risks raised in the Autumn Budget:
Inheritance Tax Relief Caps and Gifting Restrictions
The proposed £1 million cap on business and agricultural relief significantly reduces protection for larger estates. Freezer shares within a SAFO fix today’s asset values, ensuring future growth falls outside the taxable estate. This removes the need for taxable gifts, while preserving intergenerational value. The pressure to make hasty transfers to the next generation is removed, and replaced by considered allocation.
The alternative—rushed, reactive gifting—often leads to loss of control, poor timing, or adverse tax treatment. The SAFO removes this urgency.
Pensions Drawn into the IHT Net
The inclusion of pension pots under IHT for deaths before age 55 or 57 increases unpredictability in succession planning. SAFO structuring allows families to shift capital outside of pensions, safeguarding against arbitrary age-based tax triggers. Capital traditionally siloed in SIPPs can now be deployed more effectively within a central family office framework.
Additionally, as pension regulation becomes more volatile, many families are looking to unbundle their reliance on tax wrappers. A SAFO is not dependent on pension legislation, making it a more reliable long-term vehicle.
Wealth Tax Risk
Should a net wealth levy materialise, the ability to apportion growth across separate share classes becomes invaluable. Value held by trusts or lower-generation family members reduces the founder’s declared net worth, thus minimising exposure. The SAFO also creates transparency and documentation that support a more defensible position in future audits or valuations.
This flexibility will be critical if tax bases broaden in the future. A SAFO is one of the few vehicles that can absorb policy shocks across multiple fronts—income, capital gains, and wealth.
Reduction in Business and Agricultural Relief
By distributing share ownership across multiple family members and trusts, the SAFO maximises the application of relief caps and facilitates structured liquidity through redemptions, rather than forced asset sales. This kind of proactive planning turns a reactive burden into a controllable timeline.
Business owners can continue operations without disruption, knowing liquidity needs will be managed through the SAFO treasury. Likewise, agricultural families can retain stewardship of land that has been held for generations.
Income Tax Threshold Freezes
With more income pulled into higher bands, SAFOs provide a precision tool for dividend allocation. Income streams can be directed to lower-rate taxpayers, mitigating the impact of stealth tax increases. This ability to shift dividends according to income brackets is a structural solution to a policy that would otherwise erode post-tax returns.
It’s not about avoiding tax. It’s about applying a family-wide strategy that makes full use of the tax code while retaining compliance and flexibility.
Case Study: Repositioning £10 Million of Family Wealth
Consider a family holding £10 million in farmland, private equity, and investment portfolios. Two pathways emerge, each with starkly different outcomes.
Without a SAFO:
Only £1 million of business/agricultural assets are protected under current relief proposals.
Potential inheritance tax exposure of approximately £2 million.
Pension assets vulnerable if death occurs prior to age 57.
Gifting beyond £200,000 may incur a 40% tax charge.
Direct income pushes family members into higher tax brackets, reducing total family after-tax income.
With a SAFO:
Asset values are frozen in the founder's estate; future growth is directed to trust-held shares.
Dividend streams are allocated to lower-rate taxpayers within the family.
Tax obligations are met through planned redemptions, avoiding disruption or disposal of core holdings.
Pensions are no longer relied upon as succession vehicles, and the family can implement a strategy insulated from age-dependent rules.
Both structures manage the same capital. Yet one is passive, exposed, and inefficient; the other is deliberate, protected, and optimised. The difference is not theoretical—it is measurable, recurring, and strategic.
Beyond Mitigation: A Strategic Family Institution
The SAFO is more than a reactive tax planning tool. It is a foundation for long-term strategy.
Liquidity Management
A centralised treasury within the SAFO allows for share redemptions tailored to tax and cash flow needs. This transforms a potential tax burden into an opportunity for reinvestment. Distributions can be phased over multiple tax years or channelled toward charitable structures aligned with family values.
Liquidity is often the forgotten variable in succession planning. The SAFO restores that focus, enabling capital allocation that reflects strategic intent rather than last-minute pressure.
Efficient Reinvestment
Retained profits within the SAFO can be redeployed into new ventures, properties, or alternative investments, without triggering personal taxation at each step. The corporate wrapper provides operational continuity that allows capital to move across sectors and generations.
We’ve seen families use their SAFO to build venture portfolios, acquire commercial real estate, or fund philanthropic initiatives—all with tax efficiency and central oversight. The SAFO becomes a hub for purpose-led reinvestment.
Intergenerational Governance
By preserving voting rights for founders and allocating economic value to trusts or junior generations, the SAFO enables stewardship before succession. We work with several families where the next generation participates in board discussions from early adulthood, cultivating a deep understanding of responsibility before inheritance. One client recounted how regular family council meetings transformed younger members from passive beneficiaries into active contributors.
The SAFO, in this light, becomes more than structure. It is a family constitution in corporate form. One that provides continuity of vision, values, and purpose.
Conclusion: Structural Planning is No Longer Optional
The Autumn Budget 2025 does not mark a temporary deviation but a fundamental shift towards more aggressive taxation of wealth and inheritance.
Families that continue to rely on outdated structures are increasingly vulnerable. The Self-Administered Family Office offers a robust, adaptable framework to preserve capital, optimise governance, and insulate against shifting policy.
Structure is not just a tool; it is the strategy.
For families looking to secure long-term continuity and control, the SAFO is no longer a luxury—it is a necessity. Those who move early will not only mitigate tax burdens, but also lay the groundwork for intergenerational prosperity.
If this Budget felt like a warning shot, consider the SAFO your response plan.
Now is the time to structure with purpose—and protect with precision.
