Healey weighs income tax on family business handovers

Chancellor John Healey is considering plans to levy income tax on family business transfers to the next generation, potentially nearly doubling the tax bill for owners who retire and hand down their companies. The proposal would target "redeemable shares," a common method for passing on businesses that currently attracts capital gains tax at 24 percent for higher-rate payers, compared to 45 percent for income tax. This could raise hundreds of millions on top of Labour's existing inheritance tax changes, which are expected to generate £300m annually. Accountants have warned the plans risk pushing family businesses "to extinction," while the Conservatives accused the government of punishing risk-taking. The changes follow previous inheritance tax raids on farmers, which were watered down after protests, and come as Healey faces a £35bn shortfall ahead of the Budget on October 28.