Greater incentives should be offered family firms to encourage their survival, a new report has recommended.
According to the Institute for Family Business, tax incentives are needed to ensure that more firms stay in family hands.
The IFB said that the numbers of family firms are dwindling because of poor succession planning and business competition.
Some 100,000 businesses are believed to leave family hands each year.
At the moment 45 per cent of SMEs are managed by families, with 15 per cent of firms controlled by families.
But with numbers under pressure, the IFB has called on the government to help stimulate the sector with tax incentives such as an extension of Business Property Relief and Business Asset Handover Relief.
It is estimated that only a third of family firms are handed down to the second generation, while the majority of family concerns concentrate on staying afloat rather than developing and growing.
Date:5 February 2008
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