There have been many recent changes to various taxes, with more likely. Natalie Henderson, a private client solicitor at Bendles Solicitors, explains that planning ahead and taking expert advice can help to protect your assets
Andy Burnham is the UK’s fifth Prime Minister in the last four years. Living through a period of such political and economic uncertainty as this can make it hard to plan financially. This is certainly true of tax, where policy has changed significantly in recent years and further change is likely.
Nobody can predict the future. But individuals and business owners can take steps now to ensure their affairs are properly organised.
For individuals, recent changes to Inheritance Tax have highlighted the importance of reviewing wills and estate plans. From April 2027, pensions are going to start forming part of the Estate for Inheritance Tax purposes. Currently, most unused private pensions can be passed on tax-free.
Inheritance Tax is charged at 40% on estates worth more than £325,000, or £500,000 if your home is left to children or grandchildren. Many more families will find themselves facing a tax bill once pension pots worth tens or maybe hundreds of thousands are included.
People need to review their affairs to ensure that what they plan to do with their will is going to be effective for tax purposes, based on Inheritance Tax changes. They could look at gifting money – or things like property, shares or jewellery – in response to the changes. But there are lots of rules around this and it’s best to seek advice.
For farming and business-owning families, changes to Agricultural Property Relief and Business Property Relief that came into effect in April make planning even more important.
A new £2.5 million allowance applies to the combined value of property in an estate that qualifies for 100% Business Property Relief or 100% Agricultural Property Relief, or both. Relief at 50% applies to the value of any qualifying property over £2.5 million.
Again, there are many more rules associated with this and it pays to talk to an expert.
For business owners, Capital Gains Tax (CGT) has also seen several recent changes. These include Business Asset Disposal Relief increasing from 14% to 18%.
Good planning is about protecting the people and assets that matter most. Without careful planning people could face unexpected Inheritance Tax liabilities, lost tax reliefs and allowances, and increased CGT liabilities when selling assets or businesses. I’d advise you to check in with us and keep everything under review.
For more information contact Natalie Henderson at Bendles Solicitors on 01946 692165 or email nh@bendlessolicitors.co.uk.
