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Jeremy Jones, head of hotel brokerage at Christie & Co, discusses how changes to inheritance tax are impacting some hotel owners’ succession plans, and the current transaction landscape in the UK.
The inheritance tax landscape for hotel owners
The last Autumn Budget introduced significant changes to inheritance tax, particularly impacting business and agricultural property. From 6 April 2026, the first £1 million of qualifying assets will continue to receive 100 per cent inheritance tax relief, but any value above this threshold will attract only 50 per cent relief, effectively subjecting the remainder to a 20 per cent inheritance tax charge. This marks a departure from the previously uncapped regime and may have implications for family-owned hotels that exceed the new threshold.
Strategies to manage inheritance tax already require a substantial amount of forward planning, and it is important that hotel owners seek professional advice from a taxation specialist when considering their future plans.
How might this impact hotel owners in the UK?
The changes mean that there may be less tax relief for hoteliers looking to hand down the baton of their business to the next generation of family ownership. In our conversations with hotel owners, inheritance tax does feature as a consideration for some in their succession planning, with the changes adding another layer to the decision-making process.
In the UK, the sale of independent, boutique hotels is largely driven by retirement, or a desire to release equity for alternative investment purposes, given the pressures on profit margins through increased costs.
Cost pressures, particularly labour and staff-related, are key factors driving an uptick of owners deciding to sell. Currently, despite increased supply in the market, pricing has remained relatively robust because demand is still positive. However, we expect the number of owners looking to sell to increase and demand to remain relatively constant, so pricing may potentially take a downward turn over the next year or two.
What is happening in the hotel transaction market?
Across the UK, demand for independent boutique hotels is still strong. Our Hotel Market Review 2025 revealed that single-asset transactions have surged in the past year, accounting for 85 per cent of our hotel transactions in H1 2025 compared to 18 per cent in the same period in 2024. Boutique and independent hotels, especially those in popular tourist and leisure destinations, continue to attract interest, with multiple offers often received, underscoring the enduring appeal of experiential travel.
Investor appetite remains particularly strong for limited-service hotels with minimal food and beverage provision, due to reduced labour costs.
Our data also shows that regional UK markets are seeing a rise in domestic investment. We are seeing high demand for city hotels with more than 60 rooms, as well as country house hotels which offer historic charm and extensive private land. Boutique hotels which offer a real lifestyle change have an enduring appeal.
What is the outlook for the months ahead?
Any additional cost pressures on operators will impact on profits, therefore hoteliers await the upcoming Autumn Budget on 26 November with bated breath to hear if increased taxation will be announced. Inheritance tax changes are already influencing some hotel sale activity across the UK, and with strong investor demand and a deadline on the horizon, it may be an opportunity for owners to review their options. Whether selling, retaining, or restructuring, early planning and seeking expert advice is essential.
