Private Client Tax Summer Newsletter 2025

30 Jun 2025

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.

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