Several important changes have already been announced and do not depend on what happens in the Autumn Budget. These include the new High Value Council Tax Surcharge (often referred to as the mansion tax) from April 2028, higher property income tax rates for landlords from April 2027, tighter inheritance tax reliefs for some business and agricultural assets, and inheritance tax applying to unused pension funds from April 2027.  

Reviewing your position now can provide more planning options than waiting until tax changes take effect. 

No major inheritance tax (IHT) changes have been confirmed for the Budget itself. However, significant reforms are already scheduled, including the extension of inheritance tax to unused pension funds from April 2027 and restrictions to Business Property Relief and Agricultural Property Relief (BPR, APR).  

Further inheritance tax changes remain speculative, so it is generally sensible to plan based on announced legislation rather than rumours or media reports. 

Family businesses and farms may face a higher inheritance tax burden where qualifying assets exceed available relief thresholds. While reliefs remain available, recent changes mean some assets that previously qualified for full protection may now be exposed to an effective inheritance tax charge.  

Business owners and farming families should regularly review ownership structures, succession plans, wills and lifetime gifting strategies to understand the potential impact.

Pensions may remain valuable for retirement and estate planning, but their inheritance tax treatment is becoming less favourable. From April 2027, unused pension funds are expected to fall within the scope of inheritance tax. As a result, individuals with substantial pension wealth may wish to revisit their estate plans and consider how pensions fit alongside other assets, trusts and succession objectives. 

Acting purely on Budget speculation is rarely advisable. However, if you are already considering a business sale, management buyout, share disposal or company liquidation, it may be worth reviewing your plans with an adviser. Potential changes to capital gains tax (CGT) could affect the net proceeds received by business owners, but no rate alignment with income tax has been confirmed. 

• Income tax applies to earnings such as salaries, bonuses, rental profits and certain dividends 

• Capital gains tax generally applies when an asset increases in value and is sold or transferred  

The two taxes have historically been charged at different rates. Debate around aligning capital gains tax and income tax centres on whether gains and earnings should be taxed more similarly. 

Potential reform of council tax remains a topic of political discussion. While the UK Government has ruled out some wider property tax changes for now, future reforms could include band adjustments, property revaluations or changes affecting higher-value homes.  

Property owners should be aware that council tax reform can affect annual costs even where no property transaction occurs.

Crossing a threshold can affect your exposure to certain taxes and charges. For example, future property-based taxes may apply differently depending on a property’s valuation.  

Property owners should ensure they understand how their home or investment property is valued and monitor developments that could affect higher-value residential property. Early planning can help avoid surprises when new rules take effect. 

Landlords already face a confirmed increase in property income tax rates from April 2027. Beyond that, landlords should continue monitoring Budget announcements, housing policy changes and compliance requirements. Tax planning for landlords increasingly involves more than income tax alone, including ownership structures, succession planning, capital gains tax exposure and inheritance tax considerations. 

Not necessarily. Waiting can be sensible where a decision is entirely dependent on potential Budget announcements, but many tax changes discussed in the article are already confirmed. Where legislation has been enacted or implementation dates are known, reviewing your affairs now may provide more flexibility and time to act.  

Professional advice can help distinguish between confirmed changes that require action and speculation that may never become policy. 

No. The value of an estate is only one factor in determining an inheritance tax liability. Reliefs, exemptions, spousal transfers, charitable gifts, business assets, agricultural assets and lifetime gifting can all affect the eventual tax position.  

Because inheritance tax calculations can be complex, many families benefit from reviewing their circumstances well before wealth is passed to the next generation. 

A limited company can offer greater flexibility over how business profits are taxed and extracted, as well as providing a separate legal identity for the business. This separation can help limit personal liability in certain circumstances and may also enhance commercial credibility with customers, suppliers and lenders.

For some business owners, a company structure can make it easier to retain profits for future investment rather than taking all profits personally in the year they are earned. The right approach depends on factors such as income levels, cashflow needs, growth plans and administrative capacity.

There is no single income threshold that automatically makes incorporation the right choice. A review becomes particularly worthwhile when profits are increasing, personal tax exposure is rising, or the business owner no longer needs to withdraw all profits to fund their lifestyle.

Incorporation may also be worth exploring when a business is growing, taking on greater commercial risk, hiring employees, seeking investment, or working with clients that prefer dealing with companies. Regular reviews with an adviser can help ensure a business structure remains appropriate as circumstances change.

No. Incorporation is not automatically a tax-saving strategy.

The tax position depends on:

• How much profit the business generates
• How much money the owner needs personally
• How profits are extracted
• The interaction between corporation tax, dividend tax and personal tax rates

In some situations, incorporation can create efficiencies. In others, the additional compliance costs and administrative requirements may outweigh the benefits.

A detailed comparison is usually needed before deciding whether a change of structure is worthwhile.

Profits retained within a company can be used to fund future growth, build cash reserves or support future investment plans.

Unlike a sole trader, who is generally taxed on all business profits generated during the year, a company owner can choose when and how certain profits are extracted, subject to tax rules and available reserves. Many growing businesses use retained profits to invest in recruitment, technology, marketing, equipment or expansion activities.

This flexibility is one reason why incorporation is often considered by businesses that are generating profits beyond their immediate personal spending requirements.

A limited company usually faces more administration than a sole trader.

Responsibilities can include Companies House filings, corporation tax reporting, maintaining statutory records, payroll administration, dividend documentation and compliance with HMRC reporting requirements. Directors also have legal duties relating to the management of the company.

While accounting software and digital reporting tools can simplify many tasks, business owners should be prepared for a higher compliance burden and ensure suitable processes are in place from the outset.

Usually, yes, if you intend to pay yourself or employees a salary.

PAYE (Pay As You Earn) is HMRC’s system for collecting income tax and National Insurance through payroll. Company directors commonly receive a combination of salary and dividends, which means payroll reporting obligations may apply.

Setting up a PAYE scheme introduces additional administrative requirements, including payroll calculations, submissions to HMRC and maintaining appropriate records. The most suitable remuneration strategy will depend on the company’s circumstances and the owner’s wider tax position.

Making Tax Digital is changing how businesses keep records and report information to HMRC.

For some sole traders, MTD requirements may increase bookkeeping and reporting obligations, reducing the historical compliance gap between unincorporated businesses and limited companies. However, MTD should not be viewed as a reason in itself to incorporate.

Business owners should consider the wider commercial, legal and tax implications of any structural change rather than focusing solely on reporting requirements.

No. Limited liability can provide important protection, but it is not absolute.

A limited company is a separate legal entity, meaning business liabilities are generally distinct from the personal finances of its shareholders. However, directors may still face personal exposure in certain situations, such as providing personal guarantees, breaching director duties or engaging in wrongful conduct.

Business owners should understand both the benefits and the limitations of limited liability before deciding on a business structure.

Potentially, yes, but the position should be assessed carefully.

Freelancers, consultants, creatives, IT contractors and other professional service providers often consider incorporation as their income grows. Possible advantages include commercial flexibility, profit retention and the perception of operating through a corporate entity.

However, factors such as working arrangements, client contracts, compliance obligations and sector-specific tax considerations can influence the outcome. A review should consider both commercial and tax factors rather than focusing on a single issue in isolation.

Business structures should be reviewed regularly, particularly following significant changes in income, profitability, ownership, family circumstances or growth plans.

A structure that was appropriate when a business started may no longer be your most effective option several years later. Changes to tax legislation, reporting obligations, business goals and market conditions can all affect the suitability of an existing arrangement.

Regular reviews can help identify opportunities, manage risk and ensure the structure continues to support your commercial and personal objectives alike.

Early advice is important to help you understand tax consequences, structure settlements efficiently, and avoid unnecessary liabilities later in the process. Involving tax and financial advisers alongside your legal team from the outset can help you make more informed decisions throughout the process.

In some circumstances, assets can be transferred before a divorce is legally finalised. However, the timing of transfers can affect the availability of tax reliefs and exemptions. Taking advice before any transfer takes place can help avoid unintended tax consequences.

Transfers can often be made without immediate Capital Gains Tax if they take place within specific time limits or as part of a formal divorce agreement. Outside of these circumstances, transfers may be treated as taking place at market value, potentially triggering tax.

The family home is often one of the most significant assets in a divorce settlement. Depending on how and when ownership is transferred, there may be Capital Gains Tax considerations, particularly if one party has moved out before the transfer takes place. Understanding the timing and structure of any transfer can help preserve available tax reliefs and avoid unexpected liabilities.

Transfers can often be made without immediate Capital Gains Tax if they take place within specific time limits or as part of a formal divorce agreement. Outside of these circumstances, transfers may be treated as taking place at market value, potentially triggering tax.

Transfers of property between spouses as part of a divorce or formal separation agreement are generally exempt from SDLT, provided the correct documentation and structure are in place.

Business assets can be more complex to divide than cash or property. Factors such as valuation, ownership structure, shareholder agreements and future tax implications may all need to be considered. Professional advice can help ensure decisions are made with a clear understanding of both value and tax exposure.

Yes. Pensions are frequently among the largest assets considered during divorce proceedings. Different options, such as pension sharing or offsetting against other assets can have very different long-term financial outcomes. It is important to understand the value of pension benefits alongside the wider settlement.

Once ownership changes, the recipient becomes responsible for declaring and paying tax on any income generated by those assets going forward.

While still legally married, transfers between spouses are generally exempt from inheritance tax. After divorce, those exemptions no longer apply, and transfers may fall within standard IHT rules.

International cases can involve additional tax implications in multiple jurisdictions, including potential double taxation and additional reporting obligations, which requires coordinated advice.

Accurate valuations are often essential when dividing property, businesses, investments or other significant assets. A valuation provides a clearer picture of the true economic value of an asset and can help support fair negotiations and informed decision-making throughout the settlement process.

A change from sale to rent can significantly affect VAT recovery.
VAT incurred during development is often recovered on the basis that the completed properties will be sold as taxable supplies. If the development is instead retained and used to generate residential rental income, that income is generally exempt from VAT. This can reduce or eliminate the right to recover some of the VAT previously claimed, potentially creating a substantial unexpected cost for the project.

Yes, it can. Residential lettings are usually exempt from VAT, meaning there is often limited or no entitlement to recover VAT on costs directly related to generating that exempt income. For build-to-rent developments involving significant expenditure on professional fees, infrastructure and construction, the impact on VAT recovery can be considerable. Reviewing the VAT implications before changing strategy is therefore essential.

Developers should review their VAT position as early as possible, ideally before acquisition, planning, or major construction expenditure takes place. Early VAT planning can help create flexibility if market conditions change and the preferred exit route evolves from sale to long-term rental. Addressing VAT issues late in the project lifecycle may limit the options available and increase the risk of irrecoverable VAT costs.

Not necessarily. A change of intention does not automatically result in all previously recovered VAT becoming repayable. The outcome depends on the specific facts, timing and structure of the project, as well as the nature of the costs incurred and how the development is ultimately used. Professional advice can help determine whether VAT recovery can be preserved or whether adjustments may be required. 

Partial exemption is the set of VAT rules that apply when a business makes both taxable and exempt supplies. In a property context, a developer may have activities that support both VAT-recoverable and VAT-exempt income streams.
Partial exemption calculations can determine how much VAT can be recovered and can become particularly important when a development’s intended use changes. Understanding these rules early can help avoid costly surprises later.

Build-to-rent projects often involve substantial upfront development costs and long investment horizons. A project may initially be planned for sale but retained due to market conditions, funding considerations or investor preferences.
Because VAT treatment can differ significantly between sale and rental models, changes in commercial strategy can create unexpected VAT exposure if the issue has not been considered from the outset.

Yes. Joint ventures, special purpose vehicles and other property investment structures can create additional VAT complexities when objectives change during a project’s lifecycle.
A shift from development-for-sale to long-term rental may affect VAT recovery, funding assumptions and investor returns. Reviewing VAT alongside commercial and legal structures can help ensure the intended model remains tax-efficient.

Falling sales values, changing borrowing costs, investor demand and wider economic conditions can all influence whether a developer chooses to sell completed units or retain them for rental income.
While such decisions are often commercially driven, they can have major VAT consequences. Assessing VAT implications as part of strategic decision-making can help protect project economics and avoid unintended costs.

No. VAT planning can be important for developments of all sizes.
While institutional investors and large build-to-rent operators may face substantial VAT exposures, smaller developers, local authority projects, regeneration schemes and private property businesses can also be affected. Any project where the intended use may change between sale and rental should consider the VAT implications early.

A common misconception is that VAT treatment is fixed once a development begins. In reality, VAT recovery can be affected by how a project is ultimately used.
Developers sometimes focus on commercial viability without fully considering how a later change from sale to rent could alter the VAT position. Reviewing VAT throughout the development lifecycle can help ensure that commercial flexibility does not result in unexpected tax costs.

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The best approach is proactive planning. Where there is a realistic possibility that a development could move between a sale and rental model, VAT should be considered alongside funding, ownership structures, operational arrangements and long-term investment objectives.
Early specialist advice can help developers build flexibility into their plans and reduce the risk of losing valuable VAT recovery opportunities if circumstances change.

The FCA’s 2026 changes to CASS 6 and CASS 7 are primarily clarifications rather than major policy reforms. They cover areas including due diligence record retention, custody asset reconciliations, treatment of interest, Consumer Duty interactions, and settlement processes.

The FCA’s stated aim is to reduce unnecessary operational burden while maintaining existing levels of client asset protection. Firms handling client money or custody assets should review their procedures to ensure they remain compliant with the updated requirements.

The changes affect FCA-regulated firms that hold client money or safe custody assets. This includes investment firms, wealth managers, stockbrokers, custodians, platforms, and certain other financial services businesses subject to the Client Assets Sourcebook (CASS).

Compliance, risk, operations, finance, and internal audit teams may all need to understand how the amendments affect their responsibilities, policies, and controls.

Yes. The FCA has changed the retention requirement for due diligence records relating to third parties holding client assets. Records must now be kept for five years from the date they were created or last updated, rather than five years after the relevant relationship ends.

Firms should review document retention schedules, record management systems, and compliance procedures to ensure they reflect the new approach.

In limited circumstances, yes. The FCA has introduced a narrow exemption where a third party cannot provide information because of issues inherent to the assets involved, such as an insolvency, or where statements are unavailable and changing provider is not practical. The exemption is not intended for routine operational difficulties such as systems outages.

Firms must continue reconciliations as frequently as possible, document their efforts, and perform annual reviews of the arrangement.

The FCA now formally recognises Euroclear UK and International’s Investment Fund Service (IFS) System Record as a potential source for external custody reconciliations, subject to conditions around accuracy and reliability. The regulator also notes that daily reconciliation would represent best practice.

Firms considering reliance on third-party reconciliation data should ensure they can demonstrate appropriate governance and oversight.

Not directly. The FCA has clarified that firms must consider Consumer Duty requirements in certain areas of CASS, including retained interest and the use of retail clients’ safe custody assets. However, the FCA has also confirmed that CASS auditors are not expected to assess Consumer Duty compliance as part of the client assets audit. This should help avoid unnecessary expansion of audit scope while maintaining accountability for Consumer Duty outcomes through other regulatory channels.

Only in specific circumstances. The updated rules make clear that firms may retain interest on retail client money only where clients have been appropriately notified and the arrangement is consistent with Consumer Duty requirements.

Firms should review client agreements, disclosures, and notification processes to ensure they can evidence both transparency and fair customer outcomes.

The FCA now permits this in certain situations where the payment is outside the firm’s control. For example, a bank may pay interest directly into a client account under existing account terms. However, firms must ask the bank to redirect such payments to a firm account and, where that does not happen, remove the firm-owned amount from the client account no later than the next business day. Robust monitoring controls will be important.

No. One common area of uncertainty has been whether normal settlement processes could be interpreted as an impermissible use of retail clients’ safe custody assets. The FCA has clarified that ordinary settlement activity within recognised commercial settlement systems, including the use of omnibus accounts and temporary intraday movements, does not breach the rules.

Firms must still maintain appropriate safeguards to minimise the risk of loss or diminution of client assets.

Firms should carry out a targeted review of policies, controls, client communications, reconciliation procedures, governance arrangements, and record retention frameworks. Particular attention should be paid to the staggered implementation dates, operational processes around interest payments, and any situations where reconciliation exemptions may be relied upon.

Early engagement with compliance advisers, auditors, and specialist regulatory teams can help ensure changes are implemented efficiently and with appropriate documentation. BKL can support firms in assessing the practical impact of the new requirements and strengthening their client asset governance framework.

Withholding tax (WHT) is a tax deducted at source before income is paid to the musician or their business. Many countries require promoters, venues, publishers or royalty payers to withhold tax from performance fees, royalties and other entertainment income.
For internationally active musicians, this can reduce cashflow and create admin challenges, particularly where tax has been withheld in multiple countries. Although withholding tax may often be offset through foreign tax credit claims or tax treaty relief, recovery is not always automatic and usually requires careful record-keeping and advance planning.

Yes, in some cases a UK limited company may be able to access reduced withholding tax rates under a double taxation treaty. Many tax treaties between the UK and other countries provide for reduced rates on royalty payments, and some treaties reduce the withholding rate to 0%.
However, treaty benefits are not automatic. The company must usually satisfy the treaty conditions and complete the relevant applications before payment is made. Simply routing income through a company does not guarantee a lower withholding tax rate.

An LLP (limited liability partnership) is often well suited to bands and collaborative music businesses because it combines limited liability protection with tax transparency. Profits are generally allocated directly to the members, who are taxed individually on their share.
An LLP can also provide a central structure for managing touring income, foreign withholding taxes, expenses and tax credit allocations across multiple members. This can simplify administration and improve visibility over the band’s overall tax position.

The key difference is how profits are taxed. An LLP is generally tax transparent, meaning profits flow through to the members and are taxed personally. A limited company pays corporation tax on its profits and may retain earnings within the business.
A company can provide greater flexibility for reinvesting profits, funding future tours and presenting a more commercial structure to agents, promoters and rights holders. The most appropriate choice depends on factors such as income levels, future growth plans, ownership arrangements and international activities.

No. In most cases, using a personal service company (PSC) does not automatically remove withholding tax obligations. Many tax authorities apply anti-avoidance rules and lookthrough provisions where payments ultimately relate to a musician’s performance activities.
As a result, withholding tax may still apply even if the payment is made to a company, management business or agent. Effective planning focuses on complying with tax rules and securing available treaty relief rather than attempting to avoid withholding obligations altogether.

The best time to apply is usually before performances take place or before royalty payments are made. Many treaty relief procedures are far easier to implement in advance than after tax has already been deducted.
Early planning can help reduce withholding at source, improve cashflow and minimise the need for lengthy refund claims. Musicians touring internationally should review treaty opportunities well before contracts are signed and payments are scheduled.

IWhere excessive withholding tax has been deducted, it may be possible to claim a refund or offset the tax against UK tax liabilities, depending on the circumstances and the relevant treaty provisions.
However, the process can be time-consuming and may require detailed documentation from the foreign tax authority, payer or withholding agent. Maintaining accurate records of contracts, payment statements and tax certificates is essential to support any future claims.

Yes. Performance income and royalty income are often subject to different tax rules under domestic legislation and tax treaties.
Royalties may benefit from treaty provisions that significantly reduce withholding tax rates, while income from live performances is commonly taxed in the country where the performance takes place. Understanding how income is categorised can be important when structuring contracts, managing international tours and assessing tax exposure.

Musicians should retain withholding tax certificates, royalty statements, contracts, invoices, tour schedules, payment records and any correspondence relating to treaty relief applications.
Good record-keeping helps support foreign tax credit claims, treaty relief requests and compliance reviews by HMRC or overseas tax authorities. It also makes it easier to monitor how much tax has been withheld across different territories and income streams.

The most effective approach is usually a combination of advance tax planning, treaty relief applications, appropriate business structuring and careful contract review. LLPs and limited companies can help centralise administration and improve visibility over international income and taxes suffered.
Working with advisers who understand the music industry, cross-border taxation and double taxation treaties can often help musicians reduce unnecessary tax leakage, avoid compliance risks and improve cashflow forecasting for tours, royalty income and other international activities.

Founders should prepare for the emotional impact as much as the financial outcome. Selling a business often involves a loss of identity, control and routine, as well as excitement about the future. Many owners underestimate how personal the process feels until they are in it.
Taking time to reflect on your motivations, expectations and life after the deal can help you make clearer decisions and avoid regret later. Speaking to advisers or founders who have been through a sale can provide valuable perspective.

A deal can feel disappointing if it doesn’t match the founder’s expectations, even when it is objectively strong.
Many sellers carry a personal benchmark of what their business is worth based on years of effort and emotional investment. If the agreed price or structure differs from that internal valuation, it can create a sense of being short-changed. This is especially common where earn-outs or contingent payments are involved, adding uncertainty to the final outcome

Earn-outs can extend both financial and emotional pressure beyond completion. They typically link part of the sale price to future performance, meaning founders may remain involved in the business under new ownership. This can create tension if priorities shift, resources change, or external factors affect performance.
Founders should carefully assess whether the targets are realistic and how much control they will retain, as this will significantly shape the post-deal experience.

It means sellers should assess the buyer as thoroughly as the buyer assesses them.
While acquirers will closely examine financials, operations and risks, founders should also investigate the buyer’s culture, leadership style and integration approach. Understanding how decisions are made, how people are treated, and what the long-term strategy is can help avoid surprises after completion. A poor cultural fit is one of the most common causes of dissatisfaction post-sale.

Completion marks the start of a new phase, not the end of the process. Founders often face a period of adjustment as they transition into a new role or exit entirely.
There can be a sense of loss, alongside practical challenges such as integrating systems, aligning teams and adapting to new leadership structures. The first year post-deal is usually the most demanding, requiring both operational focus and careful management of relationships and expectations.

Clear communication and empathy are critical during a sale. Employees may feel uncertain about their roles, leadership, and the future direction of the business. Founders should prioritise transparency where possible, explain what is changing and why, and ensure people feel supported throughout the transition.
A structured integration plan that considers culture, not just systems, can help maintain trust and stability within the team.

A strong 100-day plan should focus on people as well as processes. In addition to operational integration, it should include clear communication on roles and expectations, onboarding support, and steps to align cultures between both organisations. It should also give the acquiring business time to understand what made the original business successful. Prioritising “hearts and minds” early on can significantly improve long-term outcomes.

No, selling a business is both a financial and deeply personal decision.
While valuation, tax planning and deal structure are important, emotional factors such as identity, legacy and relationships often carry equal weight. Ignoring these can lead to decisions that look good on paper but feel wrong in practice. A balanced approach that considers both sides leads to better outcomes and fewer post-deal regrets.

Preparation should start well before a sale is formally considered.
Being “deal-ready” means having robust financials, clear processes and the right advisers in place. It also means thinking ahead about personal goals and succession.
Early preparation allows founders to shape the narrative, strengthen valuation and reduce disruption during the transaction. It also ensures the business continues to perform while the deal is underway.

A common misconception is that completing the deal is the finish line. In reality, the most challenging work often begins afterwards, particularly around integration and personal transition. Founders who expect a clean break or immediate sense of completion can be caught off guard.
Recognising that value is realised over time, financially and personally, helps set more realistic expectations and leads to better long-term outcomes.

Pension funds are usually outside the scope of inheritance tax (IHT) under current rules. This means unspent pension savings can often be passed on to beneficiaries without forming part of the taxable estate. As a result, individuals have historically been advised to draw on other assets first.  

From 6 April 2027, this treatment changes significantly, with most unused pension funds becoming subject to IHT as part of the estate. This shift has important implications for estate planning, particularly where wills include charitable legacies. 

From 6 April 2027, unspent pension funds will generally be included in a person’s estate for IHT purposes. These funds will be treated as “notional pension property” and form part of the taxable estate calculation. While the spouse or civil partner exemption will still apply, transfers to other beneficiaries may trigger IHT.  

This change removes the longstanding advantage pensions had as an IHT-efficient asset and means many individuals will need to revisit how their wealth is structured and passed on. 

Including pensions within the estate can unexpectedly increase the value used to calculate charitable gifts. Where a will uses a formula (for example, leaving 10% of the estate to charity), the inclusion of pension funds can significantly increase the amount passing to charity.  

This may be advantageous in some cases, but it can also reduce what is left to other beneficiaries. Reviewing the wording of your will is essential to ensure that the outcomes still align with your intentions. 

Leaving at least 10% of a taxable estate to charity can reduce the IHT rate on the remainder from 40% to 36%. This rule, introduced in 2012, can create a meaningful tax saving.  

However, the 10% test is calculated based on specific estate components, including the “general component” where pensions will now sit. If pension values increase that component, it may alter whether the 10% threshold is met, potentially changing the overall tax rate applied. 

A fixed cash gift to charity may no longer qualify for the reduced 36% IHT rate if estate values change. This is because the fixed amount might fall below the required 10% threshold once pensions are included in the estate. In that scenario, the full 40% IHT rate would apply to the remaining estate. This is a common oversight and highlights the importance of aligning will drafting with evolving tax rules. 

Yes, reviewing your will before April 2027 is strongly recommended if you have pension savings and charitable legacies.  

Changes may be needed to ensure the intended balance between beneficiaries is preserved and that any available IHT reliefs are not lost. This is particularly important for wills using formula clauses or fixed charitable gifts.  

Early review also allows time to consider wider estate planning strategies. 

There may still be opportunities to manage IHT exposure, but they require more careful planning than under the current regime. Options could include revisiting pension nominations, adjusting the mix of assets used for lifetime spending, or restructuring how charitable gifts are made.  

Each individual’s position will differ depending on asset composition, family circumstances and long-term objectives, so tailored advice is essential. 

These changes will particularly affect individuals with significant defined contribution pensions, such as SIPPs, alongside other assets like property or ISAs. They are also highly relevant where estates include charitable legacies or complex will structures.  

Business owners, entrepreneurs, and private clients with accumulated pension wealth should assess the impact carefully, as the inclusion of pensions could materially increase their estate’s IHT exposure. 

Yes, the spouse or civil partner exemption continues to apply under the new rules. Pension funds passed to a surviving spouse or civil partner will generally remain exempt from IHT on first death. However, the position on second death may still result in a taxable estate, so longer-term planning remains important. This makes coordinated estate planning between partners even more critical. 

No, pensions will no longer be a reliable way to avoid inheritance tax from April 2027. While they have traditionally been treated as outside the estate, the new rules bring them firmly into scope.  

Many existing estate plans are built around the old assumptions, so failing to update them could lead to unintended tax liabilities or distributions that no longer reflect personal wishes. A proactive review helps ensure plans remain effective under the new legislation. 

Yes, full VAT recovery is now generally possible where the usual input VAT rules are met. This reflects HMRC’s updated guidance (VIT44600), aligning with the CJEU PPG case. To qualify, the costs must relate to the employer’s business activities and be incorporated into taxable supplies. Recovery may still be restricted by partial exemption or business/non-business apportionment rules, so a full review of your VAT position is essential. 

HMRC changed its approach to follow case law established in the PPG decision. Previously, HMRC assumed most pension costs related to investment (and were irrecoverable), limiting recovery to around 30%. The updated guidance recognises that pension scheme administration costs can form part of an employer’s overheads, making the associated VAT recoverable where linked to taxable business activities. 

The key requirement is that the supply must be made to the employer and supported by a valid VAT invoice addressed to them. The employer must also pay for the services. If invoices are addressed to trustees instead, input VAT recovery may be denied unless the structure is adjusted (for example, through VAT grouping or recharging arrangements). 

There are three practical routes: 

• Contract directly between the employer and service provider 

• Have the trustee register for VAT and recharge costs 

• Include the trustee in the employer’s VAT group 

Each structure has different compliance and commercial implications, including invoicing, payment flows, and potential VAT leakage. Choosing the right approach depends on how your pension scheme is currently set up.

Not always, but VAT registration can enable efficient recovery in certain structures. Where trustees register and recharge services to the employer, VAT incurred becomes part of the employer’s input VAT. However, trustees may face restrictions if they supply exempt services, so the overall VAT position should be carefully assessed. 

Yes, businesses may be able to reclaim under-recovered VAT from previous periods. Claims are typically limited to the last four years under HMRC’s time limits. You’ll need sufficient documentation, including valid invoices and evidence that the costs relate to your taxable business activities. 

VAT recovery could be restricted if the employer is not the recipient of the supply. Simply reissuing invoices is not sufficient in HMRC’s view. Instead, the trustee may need to register for VAT and formally recharge the services to the employer, creating a valid VAT invoice that supports recovery. 

Partial exemption may limit how much VAT can be reclaimed if your business makes both taxable and exempt supplies. Even where full recovery is theoretically available under the new rules, businesses must still apply their partial exemption method to determine the recoverable proportion. 

No, HMRC requires actual payment to be made. A mere agreement or intention to pay is not sufficient for VAT recovery. The employer must settle the invoice and hold valid VAT documentation to support any claim. 

Employers should review their pension scheme structure, contracts, and invoicing arrangements. This includes checking who receives services, who is invoiced, and whether VAT grouping or trustee registration could improve outcomes. A proactive review can help identify reclaim opportunities and reduce the risk of being challenged by HMRC.