Welcome to the latest edition of our Private Client Briefing, which summarises a number of issues and opportunities for individuals, families and trustees.
We are delighted to welcome Graeme Privett to the team as a Private Client Partner.
Following last year’s autumn Budget, we again find ourselves with fundamental changes to the UK tax regime, including the abolition of the“non-dom” regime, the introduction of a new Foreign Income and Gains regime and significant changes to the Inheritance Tax rules for pensions, and business and agricultural assets. After a few false starts, HMRC has Also confirmed that Making Tax Digital (MTD) for Income Tax will commence from April next year: another fundamental change for those reporting self-employment and rental income.
The newsletter includes article on the topics of:
- Pensions and Inheritance Tax Reform: From April 2027, unused pension funds over the nil-rate band become subject to IHT at 40%.
- UK Inheritance Tax Regime Changes: From April 2025, a shift from domicile to residence-based test; long-term residents face broader IHT exposure.
- Business and Agricultural Reliefs: From April 2026, 100% relief capped at £1m; remaining value at 50% relief.
- Freezing of Nil-Rate Band: Nil-rate band frozen until 2030, increasing IHT liabilities due to rising asset values.
- Abolition of Non-Dom Regime: From April 2025, end of remittance basis; foreign income taxed on arising basis with transitional reliefs.
- Taxation of Offshore Trusts: Removal of protected status; foreign income taxed on UK resident settlors/beneficiaries.
- Unremittable Income: Guidance on claiming relief for income unable to be transferred to the UK.
- LLP vs Ltd Company: Compares structures, tax treatment, flexibility, and profit sharing.
- Private Equity Tax Changes: Carried interest CGT rises to 32%, then taxed as trading income beyond April 2026.
- Making Tax Digital: Mandatory digital reporting from April 2026 for qualifying income over £50k.
- Future of Pension Salary Sacrifice: HMRC research hints at potential policy changes.
- HMRC in Focus: Increased compliance activity and use of data analytics.
- Fee Protection Service: Protection against costs of HMRC enquiries.