News and Events
Developments in private client tax.
A record of recent changes in United Kingdom tax law and practice that bear on wealthy and ultra-wealthy individuals, families and trustees. These notes are brief summaries for general information and are not advice.
High Value Council Tax Surcharge: consultation closes 14 July 2026
The Government is consulting on the detail of the surcharge on residential properties in England valued at £2 million or more, expected to apply from April 2028. Liability is proposed to rest with the owner rather than the occupier, including companies and trustees holding residential property, with valuations fixed by reference to 2026 values. Owners of high value homes should consider their position now, particularly where property is held through a structure.
Possible premium for non-resident owners under the new surcharge
Within the same consultation, the Government is gathering evidence on whether non-UK resident owners of high value homes should pay an additional premium above the standard surcharge. Internationally based families with London property should follow this closely, as it may affect the comparative cost of personal and structured ownership.
Reform of Agricultural and Business Property Relief takes effect
From 6 April 2026, full relief from inheritance tax under Agricultural Property Relief and Business Property Relief is limited to a combined allowance of qualifying property, with relief at 50 per cent above that level. The allowance was increased from the £1 million originally proposed before implementation. Estates with trading businesses, farmland or landed property should revisit succession plans, will structures and the use of trusts in light of the new caps.
UK agricultural land held through non-UK entities brought within inheritance tax
From 6 April 2026, UK agricultural land is treated as UK situated for inheritance tax purposes even where it is held through a non-UK company or similar entity. This mirrors the approach already taken for UK residential property and is significant for offshore structures holding farms and estates. Commercial property is not, at present, affected.
Business Asset Disposal Relief rate rises to 18 per cent
The capital gains tax rate applying to disposals qualifying for Business Asset Disposal Relief or Investors' Relief increased from 14 per cent to 18 per cent on 6 April 2026, completing the staged increases announced in 2024. Business owners contemplating a sale should model the tax cost under the new rate and consider the interaction with wider succession planning.
Carried interest moves into the income tax regime
From April 2026, carried interest is taxed within the income tax and National Insurance framework rather than as capital gain. Qualifying carried interest benefits from a multiplier that produces an effective rate of a little over 34 per cent for additional rate taxpayers. Fund executives should review the qualifying conditions, including the consultation on co-investment and holding period requirements.
Finance Act 2026 receives Royal Assent
The Finance Act 2026 became law on 18 March 2026, giving effect to the measures announced in the Autumn Budget 2025. Several provisions take effect from 6 April 2026, while others, notably the treatment of unused pensions for inheritance tax, commence in April 2027. The Act also introduces a registration regime for tax advisers who interact with HMRC on behalf of clients.
Spring Statement: quiet on rates, active on detail
The Chancellor's Spring Statement of 3 March 2026 announced no new tax rises for private clients. Amendments to the Finance Bill were, however, published in relation to offshore income gains and the temporary repatriation facility, and the situs of pension funds. Unused foreign pensions will be treated as located where the scheme is established, keeping them outside inheritance tax where the deceased was not a long-term UK resident.
Temporary repatriation facility: the reduced rate window narrows
Former remittance basis users can designate foreign income and gains that arose before 6 April 2025 and pay tax at 12 per cent for 2025/26 and 2026/27, rising to 15 per cent for 2027/28, after which the facility closes. Designations require careful fund tracing and record keeping, and the decision of when and how much to designate deserves proper analysis rather than default treatment.
A cap for pre-Budget excluded property trusts
Following the Autumn Budget 2025, a £5 million cap applies to relevant property charges on excluded property trusts settled before 30 October 2024. The measure gives a degree of certainty to settlors who created trusts under the former domicile based rules, though the interaction with ten year and exit charges remains complex and trustee reviews are advisable.
Charity exemption restricted to direct gifts to UK charities
The inheritance tax exemption for charitable giving is being confined to gifts made directly to UK charities and registered clubs. The restriction applies to lifetime gifts made on or after 26 November 2025 and to gifts on death from 6 April 2026. Philanthropic structures that route giving through non-charitable trusts should be reviewed before existing wills take effect.
Pensions and inheritance tax: April 2027 approaches
Most unused pension funds and lump sum death benefits will come within the scope of inheritance tax from 6 April 2027. For many families the pension has been the asset of last resort precisely because it sat outside the estate; that assumption now needs to be retested. There remains time to review beneficiary nominations, drawdown strategy and the order in which assets are spent.
These summaries reflect announcements and legislation as at the dates shown and are provided for general information only. They are not legal or tax advice and should not be relied upon as such. The law may have changed since publication. Advice should be taken on the application of any measure to your own circumstances.
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Most of the measures above reward early planning and punish delay. If a development touches your affairs, we would be pleased to advise.
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