Farrer & Co Partner Richard Lane was interviewed by Mark Estcourt, CEO at Cavendish Family Office. This content was originally published by Cavendish Family Office. From the risk-takers to the risk cautious – nobody said family business succession would be easy. Richard Lane, Partner at Farrer & Co, has spent years guiding founders and their successors through the complex process of handing over the reins. In this Q&A, he shares his insights on the key differences between generations, why risk appetite can make or break a transition, and the warning signs that a transition might be heading for trouble. You have worked with many founders handing over the reins of their businesses – what are the biggest differences between founders and the second generation in your experience? Fortunately, the majority of the entrepreneurs that I meet in my work have been successful. They have often started with very little and have built up a thriving business through hard work and a mixture of blood, sweat and tears. They are natural risk-takers and have been willing to put their businesses on the line at difficult moments in their life as they have sought to grow to the next stage. Sometimes they have not been to higher education, leaving school early to pursue a particular path. Often they have strong personalities. Their children are a real mixture. Genuinely so. It is difficult to draw threads here – but I will try. Certainly, they are better educated than their parents, most take A levels, a degree and, perhaps, a further qualification. Their parents are usually keen to impress the importance of education on their offspring. This means that often their children have a broader world experience and have mixed with people from very different and more diverse backgrounds to that of their parents. I do believe that with education comes a much greater awareness of risk. The second generation have more to lose. And it is important to understand the psyche here. Because there is a successful business to be inherited, there is more at risk for them than their parents so the path and the choices are not always so clear. Questions I often hear at this point are: Do we stick or do we twist? Do we keep the business doing what we have always done, or can we/should we move the business into a new area? These are some of the concerns that keep this group up at night. Will changes we implement negatively impact the business that Mum and Dad built? You mention opposing approaches to risk, with the next generation being more risk adverse than founders. How can this shift impact a business’s long-term success? The family business was often started by someone leaving their previous employment and branching out on their own, or with a spouse or cousin. The sector and focus was chosen as it wasn’t being catered for, or the founders believed they could do it better than others. There was little to risk, as there was little to lose. But for the next generation (or the now generation) a business has already been built. Today we talk about the importance of growth and the need to keep growing. If a business stands still it is going backwards. So, the pressure is on – and the reasons why the original business was set up may have long gone. Decisions need to be taken and this where I do see the differences between the generations. I see those new to the business finding it more difficult to make decisions, any decisions, perhaps caught in the headlights and afraid to make a mistake. I regularly counsel that the worst thing to do is often to do nothing at all, instead of taking a decision and moving forwards understanding that it is okay to fail. I believe that one can learn a lot by failing. But there is no reason why the entrepreneurial spirit should flow down the generations. I don’t think it can be forced. If it isn’t there then it is often better to sell the business. I know parents who have seen their offspring grow up into young adults and then decided to sell. Rightly or wrongly – but it happens. You describe yourself as a "risk manager" – what are the main risks you have seen when transferring a business from the original founder to the next generation? In my job I am lucky to have many roles. Being a “risk manager” sounds one of the less exciting, but it really isn’t! Lawyers are tasked with reducing risk as much as possible. Where I see my role is to understand and communicate risk. Business owners evaluate, manage, and live with risk on a day-to-day basis. They are comfortable with measurable risk. I try and map the key decision-making points to a likely risk, to a percentage outcome and to play out the options. You ask about the main risk on transfer. For me, the main risk is that the next generation has no interest, no desire to run the business and the hard work of the parents is left to slowly (or quickly) decline. Passion is key to success. What can be done to make this transition as smooth as possible? My view is that a successful transfer and transition require work from both the founder and the next generation. It is not one side’s sole responsibility. It is a key element that all parties are interested and keen to ensure the success of the transfer to the next generation. How have I seen this best done? Each family is different, so there is certainly no "one size fits all" but here are a few elements that I have found helpful: Telling the history. Communicating the story (by words and pictures) within the family of the struggles, the successes and the failures of the early years and how the business grew. I find the second generation are often unaware of what the early years of building the business encompassed. Exposure to this deepens the ties. Taking the founder outside of his/her comfort zone. Exposure to technology changes and the different priorities of the next generations is important providing ways to better understand them. What drives the children and what is important to them. This area is often helped by involving external professionals. Freeing the second generation. Making them take their own decision to come into the business, and when/if. Encouragement, or indeed in some businesses, the obligation for the next generation to work outside the family business to gain a wider experience. And then only after this point, consideration being given to a role back into the business. What are some of the most successful transitions you’ve seen, and what made them work? I won’t talk about specific successful transitions I have seen, but time and time again these three key elements stand out: communication, respect, and honesty. Communication – the importance of talking openly cannot be overstated. Creating an environment where it is encouraged to speak what is on your mind, without being afraid to do so. It's equally important to be open to changing your mind. Respect – understanding each other's perspectives and concerns is essential. True respect is shown through active listening and mutual consideration. Honesty – Saying what you are feeling is crucial, however hard. It is important to be able to express that you are ready or, not, to step into the business and acknowledge how that makes you feel – whether that's sadness, guilt, disloyalty, relief, or something else. And similarly, also for the parent wanting to hand down the reins. Life will be very difficult for all involved if people are unable to speak honestly about their feelings. And on the flip side, what are the warning signs of a transition that’s headed for trouble? Well, I could simply say it is the opposite of the above, but I would also identify the issue of leadership. When there are multiple siblings or cousins in the next generation, identifying the next CEO and leader will be key, and it should not simply be the oldest. Agreement as to the leader is important and if no such agreement and understanding is reached the possibility for future tension and fallings-out is heightened and with it the future impact on the business, and possible loss in value. Even where the next generation is keen to be involved. And finally, what advice would you give to both founders and their successors as they prepare for this journey? Much of the advice I give is set out above, but what I would also say is that the journey is best started early and carried on over time. For all sides, I do say please do try and put yourself in the other person’s shoes as much as possible and think how they might be feeling. Don’t be afraid to ask for help from professional advisers. The family business advisory world is becoming more sophisticated and can be of real help – but often it is a question of chemistry. If you don’t get on with one advisor, go and find another! But at the end of the day, my guiding principle has to be: “The founder generation had control of the past, your children that of the future, but you both are responsible for the now.” Conclusion As can be gathered from our discussion, family business succession is rarely straightforward. The differing risk appetites between founders and the next generation, combined with evolving priorities and leadership styles, can make transitions complex. Richard's insights highlight the importance of communication, respect, and honesty in navigating this process successfully. This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances. © Farrer & Co LLP, April 2025
The Channel Islands & Isle of Man
The Channel Islands (Jersey and Guernsey) and the Isle of Man offer political stability, robust legal frameworks, and favourable tax regimes with no capital gains, inheritance, or general corporate taxes. Known for their financial expertise and high quality of life, they are ideal for family offices seeking efficient wealth management and a desirable living environment.
Table of Contents
Introduction
Evaluation categories
Key numbers
FAQ

Introduction
Blending centuries-old traditions with a forward-looking approach
Jersey, Guernsey, and further, the Isle of Man, are esteemed for their political stability, robust legal frameworks, and competitive tax environment – the islands offer an appealing proposition for family offices looking to optimise their wealth management strategies and are well-known for their competitive tax policies.
With a heritage steeped in maritime history and finance, the islands have each evolved into global finance hubs, attracting businesses and individuals from around the world with their high-quality services and commitment to innovation and excellence.
Notable
The Channel Islands are renowned for their exclusive blend of British and French cultural influences, landscapes, and mild climate, making them a desirable location not just for financial services but also for a high quality of life.
Further, Jersey, Guernsey, and the Isle of Man’s reputation for financial expertise, particularly in trust and fund administration, private wealth management, and banking, stands out as a notable feature.
The islands’ commitment to privacy and security significantly enhances their appeal to high-net-worth individuals and family offices.
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Enquire NowEvaluation categories
1. Tax regulations & incentives
The Channel Islands offer a tax environment designed to support investment and wealth growth. There is no capital gains tax, no inheritance tax, and a general 0% corporate tax rate, making it an attractive jurisdiction for family offices and investors seeking efficient tax planning solutions. The absence of capital gains and inheritance taxes in the Channel Islands, combined with a favourable corporate tax regime, presents significant tax planning opportunities for family offices. The islands' tax neutrality for fund structures and the availability of various tax exemptions for certain types of investment vehicles further enhance their attractiveness. By leveraging these incentives, family offices can optimise their investment structures, ensuring wealth preservation and growth for generations to come.
Jersey offers a standard corporate tax rate of 0% for most companies, creating an attractive environment for business. However, specific sectors are taxed differently: financial services companies are taxed at 10%, while utility companies, income from the importation and supply of hydrocarbon oils, quarrying, and income from Jersey real estate are taxed at 20%. Large corporate retailers with significant Jersey-sourced revenue are taxed on a sliding scale between 0% and 20%, depending on profit levels. Additionally, there is no capital gains tax, and personal income tax is capped at 20%, enhancing its appeal for high-net-worth individuals.
Guernsey attracts family offices with its own set of financial incentives, including the absence of capital gains and inheritance taxes. The standard corporate tax rate is 0% for most companies, fostering a favourable environment for business. However, specific sectors are taxed differently: income from regulated financial services is taxed at 10%, while income from utilities, large retail businesses with taxable profits over £500,000, property development, and rental activities is taxed at 20%.
The Isle of Man offers a compelling tax regime for family offices, highlighted by the absence of capital gains tax, inheritance tax, or stamp duties. The standard corporate tax rate is 0% for most businesses, fostering a conducive atmosphere for investment and wealth preservation. However, specific sectors are taxed differently: income from banking business is taxed at 10%, retail businesses with annual taxable profits of £500,000 or more are taxed at 10%, and income derived from land and property, such as rents or property development profits, is taxed at 20%.
2. Legal & regulatory structures
The legal system in the islands is based on a mix of local legislation and English common law principles, providing a comprehensive and sophisticated legal framework for business and personal wealth management. Since 2019, Jersey, Guernsey, and the Isle of Man have implemented economic substance requirements. These regulations mandate that companies conducting relevant activities must demonstrate substantial economic activity and management presence within their respective jurisdictions, ensuring alignment with international tax standards
The Channel Islands and the Isle of Man have agreed to implement the OECD’s Pillar Two global minimum tax framework, which introduces a minimum effective tax rate of 15% for large multinational enterprises with worldwide revenues of at least €750 million per year. This measure ensures that such entities are subject to a fair level of taxation, while the existing 0/10 corporate tax regimes continue to apply to the vast majority of businesses that do not meet this revenue threshold.
Jersey’s legal and regulatory framework is tailored to support the robust operation of family offices, with a strong emphasis on transparency and compliance. The jurisdiction upholds international standards, offering a secure and flexible legal environment that facilitates asset management, trusts, and private wealth structures, ensuring the protection and privacy of family assets.
In Guernsey, family offices are governed by a comprehensive legal and regulatory structure that prioritises financial security and regulatory compliance. The jurisdiction is known for its sophisticated trust law and regulatory oversight, which provides a stable and attractive environment for wealth management activities, emphasising the safeguarding of assets and adherence to international regulatory norms.
The Isle of Man features a well-established legal and regulatory framework that caters to the needs of family offices, focusing on financial services excellence and regulatory integrity. Its legal system supports a wide range of private wealth structures, including trusts and companies, designed to offer maximum flexibility while ensuring compliance with international financial regulations, thereby securing assets and investments.
3. Economic & political climate
Characterised by their stable economic and political climate, the islands offer a secure environment for investment and business activities. Their varying geographies and close relationship with the UK, yet outside the European Union, provides a unique strategic advantage.
The economic and political stability of the Channel Islands, combined with their strategic geographic location, make them an ideal jurisdiction for family offices seeking a secure and advantageous base for their operations. The islands’ economic resilience, supported by a diversified economy and a strong financial services sector, ensures a stable environment for wealth management activities. Additionally, their political stability and autonomous regulatory regime provide a secure and predictable landscape for long-term investment planning.
Jersey’s economic and political climate is characterised by stability, low inflation, and a high standard of living. Jersey’s economy is strongly oriented towards international finance, making it an attractive location for family offices seeking a secure and prosperous jurisdiction.
Guernsey offers a politically stable and economically prosperous environment, with a focus on financial services as a key sector of the economy. Guernsey is similarly oriented towards international finance.
The Isle of Man enjoys political stability, economic resilience, and a favourable tax regime, contributing to its reputation as a secure location for international business and investment. Its economy is diversified, with a significant emphasis on finance, ecommerce, and other high-value sectors.
4. Services & talent access
The islands are home to a highly skilled workforce specialising in financial services, legal expertise, and wealth management, providing family offices with access to top-tier talent and services.
The availability of premier financial services and legal expertise in the Channel Islands is a key asset for family offices. The jurisdictions are home to a pool of highly skilled professionals across various sectors, including banking, investment management, legal services, and fiduciary services.
This concentration of expertise ensures that family offices can access the sophisticated advice and support necessary for effective wealth management and strategic planning.
Jersey is renowned for its extensive financial and legal expertise, particularly in trust and fund administration, banking, and wealth management.
The jurisdiction boasts a large number of highly skilled professionals and law firms specialised in international finance law, setting it apart with its sophisticated legal advice and financial services. Its regulatory body, the Jersey Financial Services Commission (JFSC), ensures high standards of practice, contributing to its reputation as a premier global finance centre.
Guernsey distinguishes itself with a robust offering in fiduciary services, investment funds, and insurance. It has a deep pool of financial and legal experts adept in catering to the complex needs of family offices.
The Guernsey Financial Services Commission (GFSC) oversees the integrity and competence of its financial services sector. Unlike Jersey, Guernsey has developed a niche in captive insurance and alternative investment funds, reflecting its innovative approach to financial services and legal frameworks.
The Isle of Man is recognised for its strong expertise in asset protection, insurance, and maritime services. It has a well-established community of financial and legal professionals with vast experience in serving international clients, including family offices.
The island’s Financial Services Authority (FSA) is vigilant in maintaining high regulatory standards. While it shares similarities with Jersey and Guernsey in terms of offering comprehensive financial services, the Isle of Man stands out for its significant shipping registry and bespoke insurance solutions, illustrating its unique position in the global financial landscape.
5. Culture & lifestyle considerations
The Channel Islands offer more than just financial benefits; they provide a lifestyle that is both enriching and exclusive. With stunning natural beauty, a vibrant cultural scene, and a strong sense of community, the islands offer an ideal setting for families.
The lifestyle in the Channel Islands is characterised by its blend of natural beauty, cultural richness, and community spirit. Residents enjoy a high quality of life, with access to beautiful beaches, scenic walking trails, and a variety of cultural events throughout the year.
The islands’ strong sense of community and safety, combined with excellent education and healthcare facilities, make them an attractive location for family offices looking not only for a favourable business environment but also for a place where families can thrive.
Jersey offers a rich blend of British and French cultures, reflected in its lifestyle, cuisine, and architecture. The island is known for its beautiful landscapes, from stunning beaches to picturesque countryside, making it an attractive destination for those who value nature and outdoor activities.
Jersey’s climate is mild, with warm summers and cool winters, providing a pleasant setting for both leisure and business. The most apparent difference in Jersey compared to the other Channel Islands is its vibrant cultural scene, including festivals and events that celebrate its unique heritage.
Guernsey provides a tranquil lifestyle with a strong sense of community and a slower pace of life, ideal for families and individuals seeking a high quality of life. The island is steeped in history, offering a mix of cultural influences and a variety of outdoor pursuits against the backdrop of its scenic beauty.
Guernsey’s weather is similar to Jersey’s, with mild winters and warm summers, but it can be slightly more temperate due to its position. The emphasis on community and the preservation of local traditions and the arts are what set Guernsey apart.
The Isle of Man has a distinct Celtic heritage, offering a rich cultural experience alongside a modern lifestyle. It’s famous for the TT motorcycle races, a symbol of its adventurous spirit. The island promotes a balanced lifestyle, with ample opportunities for sports, outdoor activities, and cultural engagements.
The climate is comparable to the other islands, though it can experience more variability and slightly cooler temperatures. The Isle of Man’s unique blend of ancient history and contemporary living, along with its commitment to preserving its natural environment, marks its difference in lifestyle and cultural considerations.
Resources
Service Providers

Sotheby's International Realty
United States of America RealtorsSotheby's International Realty is a real estate company that specialises in selling and buying houses and estate properties.

Innovest Advisory
Channel Islands AdvisorsInnovest Advisory is an impact investment advisory firm which supports public and private stakeholders in the creation and scaling of sustainable market-based solutions to global challenges.
Key numbers
At a glance
Evaluate key statistics to compare The Channel Islands with other regions
Comparison | Channel Islands & Isle of Man |
---|---|
Corporate Income Tax Rate |
15% |
Henley Passport Index 2023 Rankings |
3 |
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FAQ
What is the financial regulatory authority in Jersey?
The financial regulatory authority in Jersey is the Jersey Financial Services Commission (JFSC).
What is the financial regulatory authority in Guernsey?
The Guernsey Financial Services Commission (GFSC) regulates the finance sector in both Guernsey as well as Alderney and Sark.
What is the financial regulatory authority in the Isle of Man?
The financial regulatory authority in the Isle of Man is the Isle of Man Financial Services Authority (IOMFSA).
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