Wills for Business Owners: Why to Review Your Will After Buying Premises or Signing a Lease

Wills for business owners should reflect more than who inherits each asset. Buying premises or signing a lease can change your estate and liabilities. A lease can continue after death, a personal guarantee may expose your estate to claims, and ownership structure can affect inheritance and tax. Your will may no longer achieve your wishes.

This guide explains what to review when your business takes on premises.

Why a new lease or purchase matters

A will reflects your circumstances when signed. Buying premises or signing a lease changes your assets and obligations. Consider whether:

• You own valuable premises that are difficult to divide or sell

• You have continuing rent, service charge and repair obligations

• You have given a guarantee enforceable against your estate

• You share ownership with a spouse, civil partner or business associate

What has changed	Why your will may need updating
You bought premises in your own name	Your beneficial interest may pass under your will, depending on any joint ownership
You bought premises through your company	The company owns the building; your will must address your shares
You signed a lease	A lease held personally may pass into estate administration with ongoing liabilities
You gave a personal guarantee	A lender may be entitled to claim against your estate
You brought in a partner or shareholder	Your will must work alongside partnership or shareholder agreements
You moved premises	A gift identifying the previous property may fail or need updating

What happens to a commercial lease when you die

A commercial lease held by a sole individual tenant does not normally end when that tenant dies. LexisNexis guidance explains that the leasehold interest vests in the personal representatives, rather than passing directly to a beneficiary under the will. Rent, repairs and service charges may therefore remain liabilities of the estate while the lease is administered. A lease taken by a limited company is different: the company remains the tenant.

That makes three questions particularly important when reviewing your will.

• Can your executors assign or sublet the lease, and when is landlord consent required? Our commercial lease checklist for tenants explains the relevant clauses

• Who can keep the business operating while probate and estate administration are under way?

• Should the premises be retained, assigned to another tenant or surrendered, if the lease permits?

Clear powers in your will can help executors make these decisions, but they must still comply with the lease and their legal duties. Our commercial lease team can examine the terms alongside your estate-planning arrangements.

Personal guarantees do not end when you do

A personal guarantee for business borrowing or rent may continue to matter after the guarantor dies. UK Finance explains that lenders can pursue the deceased guarantor's estate, subject to the guarantee's terms and applicable legal rules.

A valid claim may reduce the assets available for family members or require property to be sold. Review the maximum liability, any continuing obligations and the conditions for release. Our guide to personal guarantees for directors explains provisions worth checking. Your solicitor should read the guarantees alongside your will and business documents.

How you own the premises matters

How you hold premises determines what happens on death.

How the premises are held	What happens on death
In your sole name	Your interest normally passes through your estate under your will
Jointly as beneficial joint tenants	The deceased owner's interest passes automatically to the surviving owner
Jointly as tenants in common	Your beneficial share passes through your estate and can be left by will
By your company	The company retains the property; your shares are dealt with separately

Joint ownership matters where premises were bought with a spouse or partner. Beneficial joint tenants cannot leave their share by will: survivorship takes priority. Tenants in common can leave their shares to beneficiaries. Our commercial conveyancing team can establish how ownership is structured, while our guide to conveyancing for commercial properties outlines the purchase process.

Inheritance tax on business premises

Business Relief can reduce inheritance tax on qualifying business interests, but ownership and use matter. GOV.UK explains that qualifying businesses, interests in businesses and shares in unlisted trading companies can receive 100% relief within the applicable allowance. Land or buildings owned personally and used by a partnership in which you are a partner, or a company you control, may qualify for 50% relief instead. Investment property does not automatically qualify merely because it is commercially let.

For deaths from 6 April 2026, the combined allowance for 100% Business Relief and Agricultural Relief is £2.5 million. Qualifying assets exceeding that allowance generally receive 50% relief. A surviving spouse or civil partner may inherit unused allowance from a deceased spouse or civil partner, potentially increasing it to £5 million. Other assets eligible only for 50% relief do not use that 100% allowance.

Four points deserve attention when buying premises.

• Two years' ownership. Relief usually requires the relevant business or property to have been owned for at least two years, although replacement-asset rules can apply

• Ownership structure. Personally owned premises used by a controlled trading company may attract 50% relief; company-owned premises form part of the company's value

• Investment businesses. Businesses mainly dealing in land, buildings, securities or investments generally do not qualify for Business Relief

• Cash flow. Inheritance tax is normally due by the end of the sixth month after death, often before probate; eligible business property can qualify for instalment payments

Property may represent considerable wealth without providing ready cash. Executors may need funds for tax and other liabilities. Your estate plan should address this. Relief and instalment eligibility depend on the facts, so obtain tailored advice.

The business itself: sole trader, partnership or company

Structure	What the will needs to address
Sole trader	The business is not a separate legal entity; executors need suitable powers to preserve, operate or sell it
Partnership	Death can dissolve a partnership unless the partnership agreement provides otherwise
Company	Shares pass through the estate, subject to the company's articles and any shareholder agreement

Executors may need express authority to continue a sole-trader business. If you are a company's sole director and shareholder, consider who can appoint a replacement. Standard model articles allow personal representatives to appoint a director in certain circumstances, but bespoke articles may differ. Buy-out provisions in shareholder agreements can affect beneficiaries, so review them alongside your will.

Plan for incapacity as well as death

A will takes effect only on death. If you lose capacity, your business may need someone authorised to handle financial affairs. A registered lasting power of attorney can allow an appointed attorney to act within its terms. Some owners arrange separate attorneys for personal and business matters. Our power of attorney team can advise, and our guides to setting up a lasting power of attorney and revoking a power of attorney explain the processes.

If you are not married

An unmarried partner does not inherit automatically under intestacy rules. GOV.UK sets out who inherits if someone dies without a valid will; a cohabiting partner is not included solely because of the relationship. Joint ownership and estate claims can complicate matters. Our guide to cohabiting couples explains some considerations, and our family law team can advise when circumstances change.

A review checklist

1. Check that your executors are suitable and have appropriate business-related powers

2. Read the lease for assignment, subletting, consent and guarantee provisions

3. Identify every personal guarantee and any outstanding liability

4. Confirm whether jointly owned premises are held as joint tenants or tenants in common

5. Check whether a gift identifying a particular property still makes sense

6. Plan how tax and continuing estate liabilities could be funded

7. Compare your will with the company's articles and any partnership or shareholder agreement

8. Make or review a lasting power of attorney for financial and business matters

Our guides to financing a commercial purchase and due diligence cover the acquisition process.

Frequently asked questions

Does a lease end when the tenant dies?

No. A commercial lease held by an individual sole tenant normally vests in their personal representatives. Estate liabilities may continue until assignment, surrender or termination.

Can a lender claim on a personal guarantee after I die?

Yes. Depending on the guarantee's terms, a lender can pursue the deceased guarantor's estate for a valid liability. Review the document and consider the potential effect on beneficiaries.

Do I need a new will after buying premises?

Not always, but you should review it. Buying premises may alter your assets, tax position, ownership arrangements or business succession plans. Your existing will may need updating.

Will my will override a joint tenancy?

No. A beneficial joint tenancy carries a right of survivorship, so the property passes to the surviving joint owner rather than under your will.

Is business premises inheritance tax free?

Not automatically. Business Relief depends on the nature of the business, the use and ownership of the premises, the qualifying period and the relevant relief limits.

Review your will before the paperwork goes cold

An earlier will may no longer reflect your responsibilities. Athi Law can review your will, ownership documents, lease and guarantees together. Our wills and probate team can help with suitable updates and succession planning. Contact our Sheffield, Dronfield or West Bromwich offices.