Resources Type: News

Crypto Tax Reporting Requirements and What they Mean for the UK

Posted on by Rida Ahmed

From 1 January 2026, crypto platforms in the UK and across the EU will start collecting far more tax-relevant customer and transaction data than before. This is not a new “crypto tax”. It is a new crypto tax reporting system that gives tax authorities better visibility of crypto activity, particularly where money moves across borders.

For many people, the impact will feel practical rather than theoretical. You will see tougher onboarding questions, more follow-up requests, and regular reviews of your account information. If you have crypto gains or income, the days of “HMRC will never see it” thinking are ending fast.

What CARF means for the UK

The UK is implementing the Crypto-Asset Reporting Framework (CARF), designed by the OECD, through UK regulations and guidance on how to report crypto tax to HMRC.

In plain terms, CARF requires reporting cryptoasset service providers to:

  • identify users
  • verify tax residence details
  • track reportable transactions
  • submit annual reports to HMRC

HMRC has also confirmed domestic reporting will cover UK resident customers using UK-based reporting providers, so the information is not only for non-UK customers. 

What DAC8 means for Europe

Across the EU, DAC8 extends tax transparency to crypto-asset transactions.

Key points from the European Commission:

  • rules enter into force on 1 January 2026
  • Platforms should start collecting data on reportable transactions from that date on.
  • reporting is due within 9 months after the end of the first fiscal year, which puts first reporting deadlines into 2027

Irrespective of whether your platform sits in the UK or the EU, the direction is the same: more data collection, then formal reporting.

The timeline that matters most

Here is the timeline we want clients to focus on:

  • 1 January 2026: UK providers begin collecting user and transaction data under HMRC’s CARF rules.
  • 1 January to 31 December 2026: first reporting period for many providers. 
  • By 31 May 2027: the first UK reports are submitted to HMRC for the 2026 calendar year.
  • 2027 onwards: tax authorities begin international data exchanges, depending on jurisdiction commitments.
  • EU reporting deadlines: due within 9 months after year-end for the first covered year, pointing to reporting windows into 2027.

What information will platforms collect and report

You should expect platforms to request and verify details that help determine who you are and where you pay tax.

Common items include:

User identity and tax residence

  • full name
  • address
  • country or countries of tax residence
  • Tax Identification Number (TIN)
  • date of birth (for individuals)

Transaction reporting

  • types of cryptoassets involved
  • gross proceeds or values for certain transactions
  • transfer activity and related values in scope of the reporting rules 

If you do not provide the required information, penalties can apply. HMRC-linked guidance highlights penalties up to £300 in relevant cases for missing or incorrect information. 

What this means for UK crypto users

CARF does not replace your current tax duties. You still need to work out whether activity triggers Capital Gains Tax or Income Tax, then report correctly through self-assessment when required.

What changes is visibility.

HMRC guidance explains the goal is to link reported crypto activity to a taxpayer’s records, so the right tax gets paid.

You will likely notice:

  • more questions when you open new accounts
  • requests for your TIN and tax residence confirmation
  • periodic prompts to reconfirm details
  • higher audit risk where figures reported by platforms do not match your tax return

Steps to take before 1 January 2026

If you hold or trade crypto, here are sensible actions you can take now.

1) Get your records in order

  • download full transaction histories from every platform you use
  • save wallet transfer records and transaction IDs
  • keep fee data, since fees can affect gain calculations

2) Reconcile what you did, not only what you remember

  • check token-to-token swaps
  • check gifts
  • check crypto used to pay for goods or services

Many people miss that certain “non-cash” disposals can still trigger a taxable event. HMRC guidance on selling or disposing of cryptoassets covers core principles. 

3) Review whether you need to correct past returns

If you have historic gains or income not reported, voluntary disclosure often provides a better outcome than waiting for HMRC contact. HMRC provides routes for paying unpaid tax on cryptoassets. 

4) Plan for 2025/26 reporting early

If you trade actively, consider quarterly record checks. It reduces the year-end scramble and cuts errors.

What this means for crypto platforms and businesses

If you operate a UK cryptoasset platform, the starting point is simple: data collection and due diligence begin from 1 January 2026 under HMRC guidance. 

The UK framework sits in law through the 2025 regulations, with registration and penalties built in. Practical priorities for providers as per requirements for crypto tax reporting include:

  • mapping required data fields
  • building tax residence and TIN capture into onboarding
  • due diligence processes to validate user information
  • reporting file preparation and controls for annual submission 

If you operate in the EU, DAC8 creates similar demands, with collection from 1 January 2026 and reporting timelines into 2027. 

How We Help You Navigate Crypto Tax Reporting

Apex Accountants help individuals and businesses prepare for CARF and DAC8 and report crypto tax to HMRC with practical, tax-led support.

For crypto investors

  • Capital Gains Tax calculations for disposals, swaps, gifts, and withdrawals
  • income reviews for staking, rewards, airdrops, mining, and employment-linked tokens
  • Self-assessment support and report preparation
  • record clean-up where histories sit across multiple platforms

For crypto businesses and platform operators

  • readiness reviews for HMRC reporting expectations.
  • user data and due diligence process design.
  • governance, controls, and reporting workflow support
  • advisor support for year-end reporting preparation and internal checks

If you want a clear plan before 1 January 2026, book a consultation with Apex Accountants.

FAQs

Does CARF introduce a new UK crypto tax?

No. CARF is a reporting and information-sharing framework. Your existing UK tax duties still apply. 

When will HMRC receive the first reports?

HMRC guidance indicates the first report covers 1 January to 31 December 2026, then it is due by 31 May 2027.

What will platforms ask me for?

Expect tax residence details and a TIN, plus identity data used to verify you. HMRC-linked commentary also notes penalties where required info is not provided. 

Does DAC8 change reporting across the EU?

Yes. DAC8 expands EU automatic exchange rules to crypto-asset transactions, with rules in force from 1 January 2026 and reporting timelines into 2027. 

Conclusion

From 1 January 2026, the requirements for crypto tax reporting move into a new phase in the UK and Europe. Platforms will collect more data, tax authorities will receive more reports, and cross-border information sharing will increase. 

If you invest in crypto, the best move now is simple: tidy your records, confirm your tax position, and then report consistently. If you run a crypto business or platform, treat 2026 data capture like a live compliance project starting on day one.

How the UK’s 2025 Tax Changes Impact Media and Tech Companies

Posted on by Rida Ahmed

2025 ended with a clear message from government policy. As per the 2025 tax changes, the government wants more production, more innovation, and cleaner reporting. Media and tech firms sit right in the middle of that plan.

Some changes went into effect already in 2025. Others were confirmed through Autumn Budget 2025 documents and ongoing consultations. For business owners, the practical question is simple: 

  1. What can you claim?
  2. What must you prove, and 
  3. What needs tighter systems before 2026?

Apex Accountants work with production companies, studios, agencies, software firms, digital platforms, and game developers. Here is what mattered most through 2025.

1) Media tax relief moved into expenditure credits

The biggest structural tax changes for media companies have been the shift to expenditure credits, with HMRC providing clear guidance.

Audio-Visual Expenditure Credit (AVEC)

For qualifying films and TV programmes, HMRC confirms a 34% rate and a separate treatment for visual effects costs. 

Key points businesses need to build into budgets and claims:

  • AVEC is taxed at the main rate of Corporation Tax, then used against the Corporation Tax liability.
  • From 1 April 2025, productions within the 34% category can claim an additional credit for qualifying visual effects costs.
  • VFX costs can qualify at 39% and are exempt from the 80% cap on total core costs.
  • HMRC notes costs incurred from 1 January 2025 can be eligible for this VFX treatment

Tax changes for media companies on the ground in 2025:

Credits improved certainty for many productions. However, evidence requirements became more important. Cost classification, supplier contracts, and workpapers now carry more weight in risk reviews.

2) Video games moved into a credit regime with a transition window

Video game studios had their own major change. HMRC guidance confirms the Video Games Expenditure Credit (VGEC) can be claimed on qualifying expenditure incurred from 1 January 2024.

What should you take from these tax changes for tech companies:

  • Production start dates matter for transitional choices
  • Documentation around qualifying spend matters more than ever
  • Long projects need early planning, not a year-end scramble

3) R&D relief: merged scheme rules became central through 2025

For tech firms, R&D remains one of the most important relief areas. HMRC guidance on the merged R&D scheme sets a clear headline point: the R&D expenditure credit rate is 20% under the merged scheme. 

What this meant for 2025 claims:

  • More firms moved onto a single merged framework
  • Claims needed cleaner technical narratives
  • Cost breakdowns needed stronger links to eligible work

Strong R&D claims still win. Weak claims create delays, enquiries, or disallowances. Systems and evidence win here.

4) Digital taxation: DST remained, with formal review published in Autumn 2025

Large digital groups kept a close eye on the Digital Services Tax (DST). A statutory review was published during the Autumn Budget 2025, examining how the tax has performed, how it is administered, and its wider impact.

For businesses, these tax changes for tech companies pointed to a clear direction of travel:

  • DST remained a live issue throughout 2025
  • Government focus stayed firmly on how value and profits link to UK activity
  • International alignment continued to shape future policy choices

This is not just a “big tech” issue. UK firms providing cross-border digital services often feel the knock-on effects of tax changes through higher platform fees, tighter contract terms, and increased compliance expectations across the supply chain.

What media and tech firms should prioritise going into 2026

These are the actions we advised clients to take during 2025. They remain critical going into 2026, especially with tighter HMRC scrutiny and credit-based reliefs now firmly in place.

1) Lock in tax relief eligibility before spending starts

Do not wait until year-end.

Before a project or development phase begins:

  • Confirm which relief applies (AVEC, VGEC, R&D, capital allowances)
  • Check the start date rules for eligibility
  • Identify which costs will qualify and which will not
  • Build relief assumptions into the project budget from day one

If eligibility is unclear at the outset, claims become weaker later.

2) Fix your chart of accounts for relief claims

Generic bookkeeping causes problems.

Your accounting system should:

  • Separate qualifying and non-qualifying costs
  • Split UK and non-UK expenditure
  • Distinguish staff costs, subcontractors, and consumables
  • Track costs by project, not just by department

This reduces errors, speeds up claims, and lowers enquiry risk.

3) Build evidence as you go, not after the fact

HMRC expects contemporaneous records.

Throughout the year, retain:

  • Signed contracts and statements of work
  • Invoices linked clearly to each project
  • Time logs or activity records for staff and contractors
  • Technical notes explaining what was produced and why

If evidence is created months later, it carries less weight.

4) Review group structure and IP ownership now

Many issues arise here.

Check:

  • Which company owns the IP
  • Where development or production actually takes place
  • How profits are allocated within the group
  • Whether royalty and licence agreements reflect reality

Misaligned structures weaken claims and attract HMRC attention.

5) Plan cashflow around claim timing, not just entitlement

Credits are helpful, but timing matters.

You should:

  • Forecast when claims can realistically be submitted
  • Understand when credits will be received or offset
  • Avoid relying on reliefs to plug short-term cash gaps
  • Factor in HMRC processing time and possible queries

Strong businesses treat credits as upside, not survival funding.

6) Assign ownership internally

Someone must be responsible.

Make sure there is:

  • A named person overseeing tax relief data
  • Clear responsibility for record-keeping
  • Regular internal reviews before year-end
  • Communication between finance, production, and technical teams

Relief fails when everyone assumes someone else is handling it.

How Apex Accountants Can Help You Deal With 2025 Tax Changes

We support media and tech companies with practical, claim-ready delivery:

  • AVEC support: qualifying checks, cost reviews, claim preparation, and enquiry defence.
  • VGEC support: transition planning, qualifying expenditure review, claim files 
  • R&D tax relief: eligibility review, technical write-ups, cost modelling, merged scheme claims.
  • Corporation Tax planning for studios, agencies, software firms, and digital platforms
  • Systems and reporting clean-up to support digital compliance and HMRC-ready records

FAQs

Does AVEC cover visual effects, or only core production?

HMRC guidance confirms separate treatment for VFX, including a 39% rate and removal from the 80% cap rules.

When can a game studio claim VGEC?

HMRC states VGEC can be claimed on qualifying expenditure incurred from 1 January 2024. 

What is the R&D merged scheme rate?

HMRC guidance sets the merged scheme R&D expenditure credit rate at 20%. 

Is DST still relevant after the Autumn Budget 2025?

A formal DST review was published in Autumn 2025, so it remained active and under evaluation through late 2025.

Conclusion

The 2025 tax agenda did not rewrite the rulebook overnight. Instead, it reshaped how incentives work, moved reliefs into credit-based systems, raised the bar on evidence, and increased expectations around transparency for digital activity.

Media and tech firms that built tax planning into day-to-day operations adapted smoothly. Those that treated it as a year-end exercise faced delays, queries, and avoidable pressure.

As we move into 2026, early tax planning matters more than ever. The right structure, clean records, and timely advice can protect cashflow and strengthen claims.

If you want practical tax support tailored to your media or tech business, contact Apex Accountants today. We help you plan early, claim confidently, and stay compliant—without unnecessary risk.

Inheritance Tax Relief Threshold Set to Rise for Farmers and Businesses

Posted on by Rida Ahmed

In a landmark announcement on December 23, 2025, the UK government revealed plans to raise the Agricultural Property Relief (APR) and Business Property Relief (BPR) thresholds from £1 million to £2.5 million. These changes, set to take effect in April 2026, will offer significant tax relief to farmers and businesses, allowing spouses and civil partners to pass on up to £5 million in qualifying assets without paying inheritance tax. This increase in the inheritance tax relief threshold comes after extensive consultations with the farming community and business owners, ensuring that the revised thresholds better address the needs of family-run businesses while maintaining fairness across the tax system.

The Impact of the New Inheritance Tax Relief Thresholds

The increase in IHT allowances is part of the government’s commitment to making inheritance tax more equitable while ensuring that vital agricultural and business assets remain within families. Here’s a breakdown of the key changes:

Inheritance Tax Threshold Increase:

From April 2026, the APR and BPR thresholds will rise to £2.5 million per estate. This allows couples to pass on £5 million of agricultural or business assets tax-free, on top of existing allowances, providing much-needed relief to family-run businesses and farms.

Targeted Relief:

The  inheritance tax threshold increase is expected to benefit smaller estates. By raising the threshold, the government aims to reduce the number of estates that are affected by higher inheritance tax bills. This shift ensures that only the largest estates will be subject to inheritance tax under the reforms.

Impact on Estates:

  • The number of estates claiming Agricultural Property Relief that are affected by the reforms will be halved, dropping from 375 to 185 in the 2026-27 fiscal year. 
  • Around 85% of estates that qualify for APR will pay no additional inheritance tax due to the increased thresholds. 
  • The number of estates affected by changes to Business Property Relief will also decline by a third, further simplifying the process and ensuring support is better targeted.

Why This Matters for Farmers and Businesses

Farming and small business sectors are vital to the UK’s economy, and this reform acknowledges the challenges these sectors face in passing businesses on to the next generation. The increase in thresholds will ensure that the tax burden remains manageable for family-run farms and businesses, allowing them to continue thriving without the fear of excessive inheritance tax obligations.

The changes reflect the government’s recognition of the importance of agriculture and rural businesses to local communities. By providing tax relief for smaller estates, the government is helping to preserve the legacy of family farms, which play a crucial role in food production and environmental management in the UK.

Key Benefits of the Increase in IHT Allowances

  • Greater Support for Small and Medium-Sized Farms: The new threshold of £2.5 million will ensure that more farms and businesses, particularly family-run operations, are shielded from hefty inheritance taxes.
  • Simplification of the Tax Process: The reforms are designed to reduce complexity, particularly for estates claiming Business Property Relief, making it easier for businesses to navigate the tax system.
  • No Additional Inheritance Tax for Most Estates: The vast majority of estates will see no increase in inheritance tax payments due to the higher thresholds. This is expected to significantly reduce financial strain for many families.

How Apex Accountants Can Help

Apex Accountants understand the unique challenges faced by farmers, business owners, and their families when it comes to inheritance tax. Our expert team provides tailored advice to help ensure that your estate planning is as tax-efficient as possible. Here’s how we can assist:

  • Inheritance Tax Planning: We help clients structure their estates to take full advantage of the available reliefs, ensuring that assets are passed on with minimal tax liability.
  • Succession Planning for Farms and Businesses: We guide clients through the complex process of passing a farm or business on to the next generation, taking into account tax efficiency and long-term sustainability.
  • Expert Advice on Agricultural Property Relief and Business Property Relief: Our team specialises in advising on APR and BPR, helping you navigate the thresholds and ensure compliance with the latest tax rules.

Frequently Asked Questions About New Inheritance Tax Relief Threshold

1. How will the new £2.5 million threshold benefit my business?

This increase will significantly reduce the number of businesses that are subject to inheritance tax. By raising the threshold, more family-run businesses can pass on their assets without incurring additional tax bills.

2. Will I still benefit from APR and BPR if my estate exceeds the £2.5 million threshold?

Yes, while assets above the £2.5 million threshold will receive 50% relief, the majority of your estate will still benefit from the full 100% relief, ensuring your family business remains protected.

3. How can Apex Accountants help with my estate planning?

We offer comprehensive estate planning services, including inheritance tax advice, succession planning, and strategies to maximise the benefits of APR and BPR. Our goal is to ensure your assets are passed on efficiently and in compliance with tax laws.

4. What happens if my spouse or civil partner passes away before the policy is introduced?

The new rules will apply to widowed spouses or civil partners as well. If your spouse has passed away before the policy is implemented, you can still benefit from the increased threshold of £5 million.

Conclusion

The government’s announcement to increase the threshold for Agricultural and Business Property Relief marks a significant step forward in supporting small businesses and farms. These reforms will reduce the inheritance tax burden on family-run businesses, helping ensure their long-term success. At Apex Accountants, we are here to assist you with navigating these changes, ensuring that your estate planning is tax-efficient and meets your long-term goals. For further guidance on how these changes affect your business or farm, contact Apex Accountants today. Let us help you secure the future of your estate while minimising your tax liabilities.

The Impact of UK Budget 2025 Changes to ISA and Savings Tax Rules on Women’s Financial Security

Posted on by Farazia Gillani

The UK government’s recent budget changes to savings tax rules and ISA (Individual Savings Accounts) aim to encourage greater investment, shifting focus away from cash savings. Although these reforms aim to enhance long-term investment, they could potentially lead to unexpected outcomes, especially for women. These changes risk widening existing gender disparities in financial security, particularly among women who rely on cash savings more than men.

What Are the Key Changes?

  • Starting from April 2027, the annual cash ISA allowance for savers under the age of 65 will be reduced from £20,000 to £12,000. 
  • Additionally, income tax on savings and property income is set to increase by 2% in 2026, further tightening the tax framework for cash-based savings. 

While these measures are part of a wider strategy to promote investment, they are likely to limit the options available for those relying on cash savings for financial security.

Why Are Women More Affected by Changes to Savings Tax Rules?

Women in the UK are significantly more likely to open and rely on cash ISAs than men. This trend is not due to an aversion to investing but a response to life circumstances that often necessitate more flexible, liquid savings options. 

Many women, particularly those with caregiving responsibilities or in part-time roles, have to navigate income disruptions, such as maternity leave, career breaks, or periods of self-employment. For these women, cash ISAs offer a stable, predictable way to save and ensure access to funds when needed.

However, with the planned reductions to tax-efficient savings options, many women will be forced to seek alternatives that may not offer the same level of security or accessibility. 

The government’s push towards investment products may not be feasible for everyone, particularly for those who need liquidity to manage the financial realities of family life or part-time work.

Impact of Budget on Cash Savers

The new ISA rules for 2027 will make it more challenging for cash savings to keep pace with inflation. Due to the changes to ISA limits, which reduce the tax-free allowance, and the increase in taxes on savings income, many savers will quickly reach their limit, leaving them vulnerable to taxes on interest income. For basic-rate taxpayers, the impact will be particularly significant, as their savings lose value due to a combination of higher taxes and ongoing inflation.

Despite these challenges, there are still strategies available within the current regulatory framework to manage these changes:

  • Maximise Tax-Free Allowances: Fully utilise your ISA allowances before they are reduced.
  • Spread Savings Across Partners: By splitting savings, you can maximise the tax-free interest each person can earn.
  • Consider Different Savings Products: Explore products that offer immediate access with alternative tax treatments.

Adapting to New Saving Strategies

While the shift towards investment may make sense for higher-rate taxpayers, many individuals may not be in a position to take on the risks associated with market investments. This is especially true for those who rely on cash for short-term liquidity needs. Some may consider investment products, but these come with the trade-off of potential capital loss or lack of guaranteed returns.

For those affected by the policy changes, it will be essential to engage in careful planning and be proactive about rate shopping. Exploring non-traditional options such as bonds, stocks, or other tax-advantaged products may be necessary to diversify and secure future savings goals.

The Market’s Response to These Reforms

The changes have already sparked concerns within the financial sector. Some building societies have raised alarms about the effects these reforms may have on their mortgage funding, as more savers move away from cash-based products. After consultations, some of the proposed measures have been paused or adjusted, yet the overall direction remains clear: encouraging investment rather than saving cash.

Gender Disparities in Financial Security

While encouraging investment may support national economic growth, it risks disproportionately affecting women, who often have fewer resources and less flexibility in how they manage their finances. The drive to push savers away from cash-based savings could leave those who rely on liquidity more exposed to financial insecurity.

Our advisers highlight that women will face a more constrained savings environment due to these new rules. However, they also stress that maintaining a consistent savings habit and understanding when and how to access funds will remain crucial to building financial resilience.

Apex Accountants’ Viewpoint

We recognise the challenges that recent changes to ISA limits and increases in taxes on savings income present for many savers, particularly basic-rate taxpayers. With the reduction in ISA allowances and higher taxes on interest income, many individuals may find their savings eroded by inflation and tax burdens.

As tax experts, we advise clients to act proactively by fully utilising their ISA allowances before the 2027 reduction. Additionally, exploring alternative savings and investment options may provide a way to minimise tax exposure while still aiming to grow savings. 

For those concerned about the impact of these changes, we can offer tailored advice to help navigate the evolving landscape and optimise your savings strategy in light of these new regulations.

How Our Services Can Help You Navigate the New Savings Tax Rules and Changes to ISA Limits

At Apex Accountants, we understand that navigating these changes can be overwhelming, especially when it comes to balancing investment goals with day-to-day financial needs. Our team of experts is here to help you adapt to the new tax rules and ensure that your savings strategy aligns with your financial objectives.

We offer personalised financial advice to help you:

  • Optimise your savings and ISA strategies
  • Maximise tax-free allowances before the reduction
  • Explore alternative savings products that suit your needs
  • Understand how the changes affect your overall financial plan

Our team is dedicated to helping you navigate these changes with confidence, ensuring your financial security is not compromised by the new regulations.

FAQs About the UK Savings Tax Reforms

1. What are the new ISA rules for 2027?

From April 2027, the cash ISA limit for under-65s will drop from £20,000 to £12,000, aiming to encourage investment rather than cash savings.

2. How do the tax increases affect savings?

Income tax on savings and property income will rise by 2% from 2026, making it harder for savings to keep pace with inflation.

3. Why are women more affected by these changes?

Women rely on cash savings more than men, often due to life circumstances like childcare, part-time work, and career breaks that require more liquid savings.

4. What are the alternatives to cash ISAs?

Higher-rate taxpayers may consider bonds, stocks, or other tax-advantaged products that offer a different tax treatment, though they come with more risk.

5. How can I maximise my tax-free savings?

Fully use your annual ISA allowance, spread savings across partners to maximise tax-free income, and consider different tax-advantaged savings products.

Understanding the Latest UK Inheritance Tax Changes (2025/26) 

Posted on by Rida Ahmed

The UK’s inheritance tax (IHT) rules have changed significantly over the past year. Fiscal drag—the practice of freezing thresholds while asset values rise—means more families are being drawn into the IHT net. Recent budget have added new rules for pensions, business assets and even non‑UK residents. We believe it’s essential to understand UK inheritance tax changes and the questions they raise so you can plan confidently.

What is inheritance tax, and why does it matter?

Inheritance tax is a wealth transfer tax applied to estates over a certain threshold. The key points are:

Nil‑rate band (NRB)

The first £325,000 of an individual’s estate is exempt from IHT. This threshold has been frozen since 2009 and will remain fixed until at least April 2031. Anything above this amount is generally taxed at 40%. Unused portions of the NRB can be transferred to a spouse or civil partner at death, effectively doubling the combined allowance to £650,000.

Residence nil‑rate band (RNRB)

An additional allowance worth £175,000 applies when you leave a main residence to a direct descendant. The RNRB is reduced for estates worth over £2 million and can also be transferred to a spouse or civil partner. Together with the NRB, a couple can pass on up to £1 million tax‑free.

Main rate

Assets above the available allowances are taxed at 40%. IHT receipts reached £5.8 billion in the first eight months of the 2025/26 tax year, reflecting steady growth due to frozen thresholds and rising asset values.

Who pays?

The personal representative (executor or administrator) must settle the IHT bill from the estate before distributing assets. Selling assets to pay tax could lead to delays.

Only around 4.6% of deaths resulted in IHT being paid in 2022–23, yet IHT is a growing revenue source. The Office for Budget Responsibility expects annual IHT receipts to rise from £9 billion in 2025/26 to £14.5 billion by 2030/31.

Key Budget Changes and Upcoming Reforms

Recent budgets have introduced important reforms and changes to inheritance tax that will reshape estate planning starting in 2027 and continuing over the next few years.

1. Threshold freezes extended

The main nil‑rate band, the residence nil‑rate band, and the tapered threshold for the RNRB will remain frozen until the end of the 2030/31 tax year. The freeze increases the number of estates subject to IHT as property prices and investments grow.

2. Transferable £1 million allowance for farm and business assets

In the Autumn 2024 Budget, the government capped the 100% relief for agricultural property relief (APR) and business property relief (BPR) at £1 million per individual. This cap applies to qualifying farm or business assets and will now be transferable between spouses or civil partners from 6 April 2026. Couples can therefore pass on up to £2 million of qualifying assets at 100% relief. Any value above the cap is eligible for only 50% relief, leaving an effective 20% IHT charge. Taxes on this excess may be paid in instalments over ten years.

3. Unused pension pots become taxable

Until now, most defined contribution pensions have been outside the estate for IHT purposes. This will change from 6 April 2027:

  • Unused pension funds and death benefits will be included in a person’s estate for IHT. Personal representatives—not pension scheme administrators—will be responsible for reporting and paying the tax.
  • Death‑in‑service benefits and dependants’ pensions remain exempt.

This reform aims to prevent the primary use of pensions as a tax shelter and to align the treatment of discretionary and non-discretionary pension schemes.

4. Residence‑based rules for non‑UK domiciled individuals

From 6 April 2025, IHT will move from a domicile‑based to a residence‑based test for non‑UK The inclusion of pensions within IHT is a major change. Under current rules, most modern pensions fall outside your estate because trustees have discretion over distribution. However, starting in April 2027, the changes to inheritance tax will include the following:

domiciled individuals. A person will be treated as a long‑term resident (and therefore liable to IHT on worldwide assets) if they have been a UK resident for at least 10 of the previous 20 tax years. The concept of domicile and deemed domicile is abolished, and the new rules apply equally to UK‑born individuals who later emigrate. Transitional arrangements apply for those who leave the UK before the rule change.

How the New Inheritance Tax And Pension Rules Affect Your Estate

  • Most unused pension funds and death benefits will be included in your estate. Even if trustees retain discretion, the funds will generally be taxable unless specific exclusions apply.
  • Personal representatives (not pension providers) will be responsible for paying the tax.
  • Defined contribution pensions are most affected; defined benefit schemes usually provide a spouse’s pension rather than a lump sum.

If you plan to leave your pension untouched as an inheritance, you should reconsider. Beneficiaries may face both income tax and IHT on withdrawals after age 75. Early planning—drawing income sooner, purchasing life insurance, or gifting from other assets—helps reduce the eventual tax bill.

Planning Opportunities and Lesser‑Known Strategies

Proactive planning remains the best way to minimise IHT. In addition to standard techniques like writing a will and using the nil‑rate bands effectively, some lesser‑known options may help:

  • Deed of variation – Beneficiaries can, within two years of a death, redirect an inheritance to others or into a trust. This can reduce the estate’s IHT liability while still benefiting the family.
  • Business Property Relief (BPR) and AIM shares: Investments in qualifying unlisted companies or certain AIM shares can become exempt from IHT after two years. Note that starting in 2026, the IHT savings from AIM shares will be halved, so careful timing and risk assessment are essential.
  • Gifts out of surplus income: Regular gifts from income are immediately exempt if they do not reduce your standard of living. With pensions entering the estate, drawing pension income to fund gifts can be more tax‑efficient.
  • Life insurance held in trust: Policies can provide funds to cover IHT and avoid being part of your estate. Premiums may be covered by the surplus income exemption.
  • Trusts and family investment companies: These structures can allow assets to be moved outside your estate while retaining some control. Trust rules are complex, especially with new caps on APR/BPR for trusts created after October 2024, so professional advice is vital.
  • Lifetime gifting and utilisation of allowances: Gifting assets more than seven years before death removes them from your estate but may trigger capital gains tax. Under current rules, gifts of farm or business assets made before 6 April 2026 can still receive unlimited relief.

Planning strategies must be tailored to individual circumstances and kept under review as legislation evolves.

Non‑Dom Reforms – What You Should Know

The move to a residence‑based IHT regime is particularly significant for internationally mobile individuals. Key points include:

  • Long‑term resident test: Non‑UK assets fall within IHT if you have been UK resident in 10 of the previous 20 tax years. For those aged under 20, the test looks at whether the individual has been a UK resident for at least half of the years since birth.
  • No more deemed‑domicile concept: The concept of deemed domicile (15 of 20 years) is replaced; residence is the sole determinant.
  • ‘Tail’ period after leaving the UK: A long‑term resident remains liable for IHT on worldwide assets for up to three to ten years after becoming non‑resident, depending on how long they were a resident before. Once someone has been non‑resident for ten consecutive years, their worldwide assets become excluded property again.
  • Transitional rules: Individuals who left the UK before 6 April 2025 may remain under the old rules until they return.

In light of these reforms, international clients must review their residency, asset structures, and any existing trust arrangements.

How We Can Help You Deal With Latest UK Inheritance Tax Changes

Apex Accountants understand that inheritance tax can feel complex and personal. We provide comprehensive support to help families, business owners and international mobile individuals manage their IHT exposure. Our services include:

  • Estate and IHT planning: We help you structure your estate to make full use of NRB, RNRB and agricultural/business relief, prepare wills, and manage lifetime gifting.
  • Pension and retirement planning: We review your pension strategy in light of the 2027 reforms and advise on income drawdown and life insurance to mitigate tax.
  • Agricultural and business succession planning: We advise on using the new £1 million allowance effectively, transferring allowances between spouses, and funding any tax due—helping you pass on farms and businesses without breaking them up.
  • Trusts and family investment structures: Our team designs and implements trusts or family investment companies, considering new limits on APR/BPR and trust allowances.
  • Non‑dom and cross‑border advice: We guide internationally mobile clients on the new residence‑based rules, the 10‑year tail, and strategies to manage worldwide assets.
  • Reporting and compliance: Our team prepares and submits IHT400 forms, maintains communication with HMRC, and guarantees accurate calculation and timely payment of all taxes.
  • Valuation and funding solutions: We work with specialist valuers and insurers to determine the value of your assets and arrange life cover or financing where needed.

Conclusion

Inheritance tax is increasingly important for UK families, business owners and expatriates. Frozen thresholds, the inclusion of pensions, a transferable cap on farm and business relief, and a shift to residence‑based rules all mean more estates will face IHT over the coming decade. At the same time, allowances and reliefs can still help you protect your wealth if used wisely.

We encourage readers to review their estate plans now, particularly if you intend to rely on pension wealth or own farms or businesses. Taking professional advice early can help ensure your legacy passes to the next generation with minimal tax. The inheritance tax and pension rules are evolving quickly, and our team at Apex Accountants is here to guide you through it.

FAQs

Recent policy announcements have led to a surge in IHT queries. These are some of the most common questions our clients ask, with concise answers drawn from official guidance and industry sources.

1. How much can my family inherit before IHT becomes payable? 

Each individual has a £325,000 nil‑rate band and a £175,000 residence nil‑rate band. Couples can transfer unused allowances to pass on up to £1 million tax‑free.

2. Is my pension included in my estate? 

Currently, pensions are outside your estate if trustees have discretion. From April 2027, most unused pension funds and death benefits will be included.

3. What gifts can I make without triggering IHT? 

You can give away up to £3,000 each tax year without affecting your estate. Small gifts of up to £250 per recipient and wedding gifts of up to £5,000 for children are also exempt. Regular gifts from surplus income are immediately exempt if they do not reduce your standard of living.

4. Can I give my house to my children to avoid IHT? 

Yes, but you must live for seven years after making the gift to remove it from your estate. If you continue to live in the property, it counts as a gift with reservation and remains taxable.

5. Who actually pays the IHT bill? 

The tax is paid by the estate, not the beneficiaries. Executors or administrators are responsible for settling IHT before distributing assets.

6. Are the new £1 million allowances transferable between spouses? 

Yes. Any unused £1 million allowance for farm or business assets can be transferred to a surviving spouse or civil partner, giving a couple up to £2 million of relief.

7. How can farmers pay the 20% tax on assets above the allowance? 

Tax on the excess (where only 50% relief applies) can be paid over ten years without interest. Many farmers also use life insurance or gifting strategies to provide cash for future tax bills.

8. What happens to non‑UK domiciled individuals? 

From April 2025, liability for IHT depends on UK residence. An individual who has been resident for at least 10 of the last 20 years is considered a long‑term resident and is taxed on worldwide assets.

What You Need to Know About 2026 Inheritance Tax Reforms for Farmers 

Posted on by Rida Ahmed

The chancellor’s decision to cap agricultural property relief has shaken the farming community. From 6 April 2026, only the first £1 million of combined agricultural and business property will attract 100% inheritance tax relief. Anything above this threshold receives 50% relief, meaning an effective 20% inheritance tax (IHT) becomes payable. The inheritance tax reforms for farmers are intended to curb the use of farmland as a tax shelter for wealthy estates, but many farming families fear they will be caught in the cross‑fire. As accountants and tax advisers, Apex Accountants can help you navigate these changes and protect your legacy.

What Are The New Inheritance Changes For Farmers?

  • Cap on full relief: From April 2026, full (100%) agricultural and business property relief applies only to the first £1 million of qualifying assets.
  • 20% tax on the excess: Assets above £1 million qualify for 50% relief, leaving a 20% tax payable instead of the normal 40%. The tax can be paid over ten years, interest‑free.
  • Spousal transfers: Relief continues to be available for transfers between spouses and civil partners. Following the 2025 Budget, any unused £1 million allowance can be transferred to the surviving spouse, potentially giving a couple relief on up to £2 million of combined agricultural and business assets.
  • Other allowances remain: Each person still enjoys a £325,000 nil‑rate band and, where a main residence passes to a direct descendant, a £175,000 residence nil‑rate band. Together with the new £1 million agricultural allowance, this could allow a couple to pass on up to £3 million tax‑free.

Why Farmers Are Concerned

Many farms are asset‑rich but cash‑poor, so raising funds to pay a 20% tax may force sales of land or livestock. Farmers worry that the reforms:

  • Ignore liquidity – Land cannot be easily sold to pay a tax bill.
  • Threaten generational continuity – Family farms operate across generations, and a significant tax liability could disrupt succession.
  • Undervalue public benefits – Farms provide food security, wildlife habitats and rural jobs. Critics argue these reforms punish those contributions.
  • Risk consolidation – Smaller family farms could be forced to sell land to larger agribusinesses.

Planning Steps You Can Take To Deal With Farmers Inheritance Tax

Proactive planning before April 2026 is essential. Here are key actions farmers should consider:

  • Review ownership structures – Ensure assets are held in the most tax-efficient way. Transfers between spouses are free of IHT and can defer tax until the second death.
  • Plan the succession – Decide who will inherit the farm and whether gifts should be made during your lifetime. Lifetime gifts count as potentially exempt transfers (PETs) and fall outside IHT if you survive seven years. Using the pre‑2026 window allows unlimited relief on current transfers.
  • Ensure continued agricultural use – Land must remain in agricultural use to qualify for relief.
  • Obtain accurate valuations – Know how much of your estate might exceed the £1 million cap.
  • Update wills – Make sure your will uses both spouses’ allowances. Writing a will that leaves £1 million of qualifying assets for the next generation can utilise each spouse’s allowance and maximise relief.
  • Consider gifting – Gifting assets now, rather than on death, may remove them from your estate completely after seven years. Gift holdover relief can defer capital gains tax, meaning no CGT may be payable if you live seven years after the gift.
  • Use life insurance – A life insurance policy can provide funds to pay any IHT due if you die within seven years of making a gift. Premiums could be far lower than the potential tax liability.

Implications for Succession Planning

A well‑thought‑out succession plan is more important than ever. Farmers should prioritise personal and family wishes over tax efficiency. Consider:

  • Family aspirations – Discuss who wants to run the farm and who will benefit from the land.
  • Income needs – Ensure gifts or transfers still provide you with sufficient income during retirement.
  • Timing – Start planning early to understand the impact of the new legislation and to make appropriate arrangements.

If your children do not wish to farm, you might sell or rent out the land or structure ownership shares so that non‑farming children can benefit from the asset without running the business.

Potential Use of Trusts and Other Vehicles

Trusts can play a role in succession planning. Transferring assets into trust before the new rules apply may reduce future IHT liabilities. However, trust planning is complex, and professional advice is essential. Draft legislation indicates that each trust created before 29 October 2024 will have its own £1 million allowance, while trusts created after that date may have to share an allowance. Further adjustments are expected following a technical consultation, so ongoing monitoring is needed.

How Our Services Can Help You Navigate Farmers’ Inheritance Tax 

Apex Accountants specialises in helping farming families plan for the future. Our expertise covers:

  • Inheritance Tax and Succession Planning – We review wills, ownership structures and partnership agreements to maximise reliefs and ensure assets pass to the right people.
  • Farm Valuations and Relief Eligibility – We assess which assets qualify for agricultural and business property relief and identify potential exposure to the new 20% tax.
  • Gift and Trust Planning – Our experts advise on lifetime gifts, trust structures and potential capital gains tax implications, helping you take advantage of the pre‑2026 window.
  • Life Insurance and Funding Solutions – We work with insurance partners to arrange policies that can cover any IHT liabilities, giving your beneficiaries breathing space.
  • Business and Financial Advice – Our team provides ongoing support on cash flow, budgeting and diversification to improve profitability and resilience.
  • Environmental Schemes and Grants – We help clients access government support for sustainable farming, which can enhance income and offset tax liabilities.

If you are worried about how the reforms could affect your farm, contact Apex Accountants for personalised advice.

Conclusion

The upcoming inheritance tax changes for farmers represent the most significant change to agricultural property relief in decades. While the intention is to prevent wealthy landowners from using farmland as a tax shelter, the cap on relief may affect many family farms. By understanding the changes, reviewing ownership structures, updating wills and making strategic gifts, farming families can mitigate their impact. Early action is essential. Working with experienced advisers like Apex Accountants ensures that your farm remains viable for future generations.

FAQs About Changes To Inheritance Tax For Farmers 

What are the new farmers inheritance tax rules?

From April 2026, UK rules cap 100% Agricultural and Business Property Relief at £1m per person on combined assets. Above this, 50% relief applies, yielding a 20% effective tax rate instead of 40%. Spouses can now transfer unused allowances, doubling to £2M in full relief.

Has inheritance tax changed for farmers?

Yes, changes effective April 2026 limit full relief to £1m of qualifying farm assets per individual. Excess faces 50% relief for a reduced 20% IHT rate. Transferable allowances between spouses protect family farms up to £2m combined.

What is the agricultural relief on inheritance tax?

Agricultural Property Relief offers 100% IHT relief on qualifying farmland value up to a £1m lifetime cap from 2026. Beyond £1m, 50% relief reduces tax to a 20% effective rate. Assets need two to seven years of agricultural use.

Will farmers have 10 years to pay inheritance tax?

Yes, farmers pay IHT on excess farm assets over £1m in interest-free instalments over 10 years. This applies to APR/BPR qualifying property from April 2026. It eases cash flow without loans or immediate sales.

Are the £1 million allowances transferable between spouses? 

Yes. After Budget 2025, any unused £1 million allowance can be transferred to a surviving spouse or civil partner, potentially giving a couple up to £2 million of agricultural relief. This allowance is in addition to the transferable nil‑rate and residence nil‑rate bands.

How can I pay a 20% tax if my farm has little cash? 

The tax may be paid in equal installments over ten years, without interest. Many farmers opt for life insurance, which offers a lump sum payment upon death, or they plan to gift assets during their lifetime to minimise their tax burden.

Should I start giving away farmland now? 

Lifetime gifts can remove assets from your estate after seven years, but they may trigger capital gains tax. Under current rules, gifts made before 6 April 2026 still receive unlimited relief. Professional advice is essential to structure gifts correctly and ensure continued agricultural use.

My children do not want to farm. What are my options? 

You could sell or rent out the farm or structure ownership so that non‑farming children hold shares and receive income while another farmer runs the business. Succession planning should align with both family wishes and tax efficiency.

Will trusts help reduce inheritance tax? 

Trusts can remove assets from your estate and each trust created before 29 October 2024 has its own £1 million allowance. However, trusts established after that date may share an allowance, and rules are still being finalised. Trust planning is complex, so seek professional advice before acting.

Do small farms need to worry? 

Government estimates suggest that the wealthiest estates will pay most of the additional tax, but industry bodies argue that many more family farms could exceed the £1 million threshold when both agricultural and business assets are counted. Even modest farms with high land values may face a 20% tax on part of their estate.

What happens if the farm is jointly owned? 

Couples can combine their allowances to pass up to £2 million of qualifying assets to the next generation tax‑free. Careful drafting of wills or partnership agreements ensures both allowances are fully used.

Will there be further changes? 

The legislation is still being refined. A technical consultation is planned, and the rumoured changes include lifetime caps on tax-free gifts and extensions to the seven-year PET period. Ongoing advice is crucial as the rules evolve.

How can Apex Accountants help? 

We provide customised advice on inheritance tax planning, succession strategies, gift and trust structures, valuations, and funding solutions. We aim to help you protect your family farm and pass it on to the next generation with minimal tax burden.

First-tier Tribunal (FTT) on VAT on Cooked Food and Its Impact on Your Business

Posted on by Farazia Gillani

The FTT’s recent decision regarding Morrisons’ rotisserie chickens has serious consequences for food retailers across the UK. In a ruling that places rotisserie chickens under the standard 20% VAT rate for hot food, the court has sparked important questions for businesses. This article will explain what this ruling means for your operations, why it is relevant for your business in terms of VAT on cooked food, and how it could affect your pricing strategy moving forward. Stay ahead of the changes and understand how to ensure your business is fully aligned with the latest VAT regulations.

What Was the Court Ruling on Morrisons’ Rotisserie Chickens?

After losing a legal challenge against HM Revenue & Customs (HMRC), Morrisons, a major UK supermarket chain, now faces a £17 million tax bill. The case centred on the potential application of VAT on Morrisons’ rotisserie chickens. The supermarket argued that the chickens, which are often eaten cold or reheated later, should not attract the standard 20% VAT rate applied to hot food.

However, the court ruled that the rotisserie chickens are still considered “hot food” for VAT purposes. The key factor in the court’s decision was that the chickens were sold while still above ambient temperature, despite being packaged to cool down. Even after two hours, the chickens were still warm at temperatures between 42°C and 45°C. Without the special packaging, the temperature would have been much lower—around 31.8°C.

This ruling highlights that food items, even those intended to be consumed cold later, are still subject to VAT if they are sold at temperatures significantly above ambient levels when purchased. Understanding HMRC VAT rules for food is crucial to prevent unexpected tax liabilities.

How Does This Affect My Business if I Sell Hot or Cooked Food?

If your business sells cooked food such as rotisserie chickens, pies, or other takeaway meals, this ruling has important implications. If your food is sold while still hot or warm, even if it’s later consumed cold, it could be subject to the standard 20% VAT rate.

For example, food products stored in a hot cabinet and sold while still above room temperature would fall under the VAT charge. However, if the food cools down and is sold at room temperature, it may not attract VAT. The key factor is whether the product is still considered “hot food” when sold.

How Retailers Can Ensure Compliance with VAT

To ensure VAT compliance for food retailers, businesses selling cooked food must be clear about when VAT applies. If food products are stored in a way that retains heat or are sold while still above ambient temperature, VAT will likely apply. This includes items like rotisserie chickens that remain warm at the point of sale. On the other hand, food sold at room temperature or that cools naturally before sale may be exempt from VAT. Retailers should carefully review how they store and display their food to ensure they follow the correct HMRC VAT rules for food.

Adjusting Prices to Reflect VAT

VAT-registered businesses must display prices inclusive of the 20% VAT on hot takeaway food (VAT Notice 709/1, para. 2.5).

 For example, a rotisserie chicken priced at £4.40 net will be £5.28 inclusive (£4.40 net + £0.88 VAT). When reclassifying from zero-rating, businesses should determine if previous prices need adjustment to maintain net margins.

A price increase from zero-rated £4.40 to VAT-inclusive £5.28 may reduce volume by 10%–20%, especially among price-sensitive customers. To mitigate this, retailers can test pricing in stores, offer loyalty schemes, bundles, or promotions, and shift to zero-rated cold products. Absorbing the VAT cost or seeking HMRC clearance may also help avoid penalties.

Reclaiming VAT on Cooked Food Products

If your business is VAT-registered, you can reclaim VAT on purchases used for business purposes. This includes ingredients and other supplies used to prepare cooked food products. To maximise the benefits of the VAT system, it’s essential to track and report your VAT accurately, ensuring that you’re claiming the correct amount. These steps will help your business maintain compliance while improving cash flow and managing your tax liabilities effectively.

How Apex Accountants Can Support Your Business with VAT on Cooked Food

At Apex Accountants, we offer expert VAT consultancy to help your business stay compliant with the latest regulations. If you sell cooked foods, such as rotisserie chickens, we can guide you through the complexities of VAT, ensuring your pricing strategies reflect the correct tax treatment and minimising your tax liabilities.

Our services include:

  • VAT Compliance and Advisory for Food Retailers
  • Pricing Strategy Optimisation to Account for VAT
  • VAT Registration and Reporting Assistance
  • Support with VAT Audits and Disputes
  • Tailored VAT Solutions for the Retail Sector

By partnering with us, you can confidently manage your VAT obligations, stay ahead of changes, and make informed decisions that support your business’s growth and compliance.

What Should You Do Next?

If you’re unsure about how VAT applies to your food products, now is the time to review your sales practices and packaging. You may need to adjust your pricing or sales strategy to ensure compliance with VAT regulations. At Apex Accountants, we’re here to help you manage these changes and support your business in maintaining VAT compliance for food retailers.

If you need any clarification about VAT or need assistance with your pricing strategy, don’t hesitate to get in touch with us today.

Tax Rebate Owed to Deceased Estate: What You Need to Know

Posted on by Rida Ahmed

When a person passes away, handling their financial affairs becomes a critical responsibility for the executor. One area of concern is whether a tax rebate owed to the deceased forms part of their estate for inheritance tax (IHT) purposes. In a recent case, the UK First-tier Tax Tribunal (FTT) provided clarity on this issue, ruling that a tax rebate owed to deceased estate at the time of death should be included in the estate for IHT calculations. This decision is crucial for those managing estates and handling tax rebates, as it confirms that tax rebates are indeed treated as assets of the estate, impacting the overall inheritance tax liability.

This ruling provides both guidance and practical implications for executors and estate administrators in understanding how a tax rebate for deceased person is handled under UK inheritance tax law. The clarity on this issue ensures that tax refunds owed to the deceased are accounted for correctly, helping to avoid future disputes or errors in inheritance tax return for deceased estate submissions.

What Was the Case About?

The case involved the late Eunice Thomas, who passed away in December 2020. Eunice had been receiving income from pensions and dividends and had designated her son to manage her financial affairs via an enduring power of attorney (EPA). In May 2020, a tax return was filed on her behalf for the 2019/20 tax year, which showed an overpayment of income tax amounting to £66.03. Although the rebate was not paid before her death, the contingent right to the repayment existed at the time of death, making it an asset for inheritance tax (IHT) purposes, as per HMRC’s guidance.

Following Eunice’s passing, her son, as executor of the estate, filed an inheritance tax return for deceased estate, valuing the estate at £476,542.04, which included an estimated income tax repayment of £1,340 as part of the estate’s assets. However, the son later amended this IHT return, claiming that the tax repayment should not be included in the estate. He argued that, as the deceased had no enforceable right to the repayment at the time of death; it should not be considered property for IHT purposes.

However, as HMRC’s guidance in the Inheritance Tax Manual (IHTM28330) confirms, income tax overpayments owed at the date of death are treated as property passing on death if there is a contingent right to them, which was the case here. The son’s amendment was rejected, as section 5(1) of the Inheritance Tax Act 1984 defines property broadly, including choses in action like tax repayment claims, which must be valued at the time of death.

What Did the Tribunal Decide?

The FTT sided with HMRC, ruling that the right to the tax rebate for deceased person was indeed part of Eunice’s estate. The tribunal clarified that, while the tax rebate would only be paid after her death, the right to receive that payment existed before her passing and was therefore an asset of the estate. According to the FTT, the term “property” under the Inheritance Tax Act (IHTA) includes all forms of rights and interests, including those that may be payable in the future. Therefore, the right to a tax rebate is considered property for inheritance tax purposes, even though it would not be paid out until a later date

The FTT also rejected the appellant’s argument that the tax rebate was merely a “hope” and not a legally enforceable right. The tribunal found that the right to the repayment existed at the moment of Eunice’s death and became part of the estate, subject to inheritance tax.

Why Executors Should Include the Tax Rebate Owed to Deceased Estate in the IHT Return

This ruling serves as an important reminder to executors and administrators of estates that any tax rebates owed to a deceased individual should be included in the IHT return. Even if the rebate is not payable until a later date, the right to receive it exists as an asset of the estate. When valuing the estate for inheritance tax purposes, executors must properly account for any expected tax refunds or rebates.

It’s also worth noting that the FTT’s decision reinforces the broad definition of “property” under inheritance tax law, which includes not only physical assets like cash or property but also rights and claims, such as the right to receive a tax rebate.

How Can Apex Accountants Help With Inheritance Tax and Estate Administration?

At Apex Accountants, we offer expert services to help you manage the complexities of inheritance tax and estate administration. Whether you are an executor or a family member handling an estate, we can guide you through the process with clarity and precision.

Our services include:

  • Inheritance Tax Planning: We offer advice on how to reduce inheritance tax liabilities and ensure tax-efficient estate planning.
  • Estate Administration: We assist executors with all aspects of managing an estate, ensuring that all assets, including tax rebates, are properly included in the IHT return.
  • Tax Rebate Advice: We provide expert guidance on how income tax rebates should be treated in an estate and help ensure they are correctly included for inheritance tax purposes.
  • Final Tax Returns: Our team can assist with filing final tax returns for deceased individuals, including any income tax rebates due.
  • Asset Valuation: We ensure all assets, including intangible rights like tax rebates, are properly valued as part of the estate.

For expert advice on managing tax rebates in estates and navigating inheritance tax, contact Apex Accountants today. Our experienced team is ready to assist you with all aspects of estate administration. Book your free consultation today!

FAQs

What Happens to Tax Rebates Owed to a Deceased Person?

Tax rebates owed to a deceased individual form part of their estate for inheritance tax purposes, even if the payment is made after death.

Should Tax Rebates Be Included in an IHT Return?

Yes, any tax rebates owed to the deceased at the time of death should be included as assets in the IHT return.

Are Tax Rebates Considered Property for Inheritance Tax Purposes?

Yes, the right to a tax rebate is considered property for inheritance tax purposes, as it is a legally enforceable right.

Can a Tax Rebate Be Excluded From an Estate for Inheritance Tax?

No, unless there is a specific exemption. The right to a tax rebate is considered part of the estate and should be included in the inheritance tax calculations.

How Can I Reduce Inheritance Tax Liabilities on an Estate?

Strategic planning, such as gifting during the deceased’s lifetime, using trusts, and taking advantage of exemptions, can help reduce inheritance tax liabilities.

Understanding the UK Tax Assurance Plan and Its Impact on Mega Infrastructure Projects

Posted on by Farazia Gillani

The UK government is set to introduce a new tax assurance plan in mid-2026. This initiative aims to provide clarity on tax obligations for major infrastructure projects before they even begin. With this move, the government hopes to streamline the process, reduce disputes, and make investments more attractive to businesses. Here’s what UK tax assurance plan means for the future of infrastructure development in the UK.

What Is the UK Tax Assurance Plan?

The Tax Assurance Plan is designed to give investors certainty about their tax positions before launching large-scale infrastructure projects. By confirming tax obligations in advance, this initiative aims to reduce the chances of legal disputes and costly delays caused by unclear tax positions.

This program will help businesses avoid tax-related surprises that could arise after an audit. It aims to resolve any uncertainties early in the planning stage, helping businesses move forward with confidence.

Why Is the Tax Assurance Plan Important?

Reduces Uncertainty: 

Tax-induced uncertainty has often led to higher costs, known as “uncertainty premiums,” during audits. This new assurance service will help businesses avoid these extra costs.

Encourages Investment: 

By providing clarity early on, the plan makes it easier for businesses to plan their investments. This is especially crucial for major infrastructure projects, which often require large financial commitments.

Streamlines Major Projects: 

Clarity on tax obligations for major infrastructure projects reduces the risk of disputes, speeding up the planning and development process for infrastructure projects.

How Will It Benefit UK Businesses?

  1. Early Clarity on Tax Positions: Investors can now secure assurance about their tax obligations well before starting projects. This clarity ensures there are no surprises down the line.
  2. Minimises Risk of Legal Disputes: By resolving any potential tax issues upfront, businesses can avoid long and expensive court battles.
  3. Encourages Economic Growth: The government’s goal is to create a more predictable tax environment, which could attract more investment and stimulate growth in key industries.
  4. Saves Time and Money: The plan helps reduce costs associated with resolving tax disputes and ensures a smoother project execution.

Impact on Major Infrastructure Projects

This tax assurance plan is especially important for large-scale infrastructure projects, which often involve significant investments and complex tax regulations. By ensuring that tax positions are clear from the outset, businesses can avoid costly delays and proceed with their projects without the added stress of unresolved tax issues.

As the government seeks to stimulate economic growth through infrastructure investment, this initiative aligns with their broader objectives to create a stable, transparent, and business-friendly environment.

How Our Tax Planning and Assurance Services Can Help

Apex Accountants provide expert advice on tax planning and assurance services. Whether you are embarking on a large infrastructure project or need guidance on your tax obligations, we are here to help you navigate the complexities of the UK tax system. Our services are designed to ensure compliance while maximising opportunities for growth.

Conclusion

The introduction of the Tax Assurance Plan in 2026 offers a major opportunity for businesses involved in large infrastructure projects. By providing clarity on tax obligations upfront, the UK government aims to reduce uncertainty and prevent costly disputes, allowing projects to proceed more smoothly. This initiative is designed to encourage investment, reduce legal risks, and ensure that businesses can move forward with confidence.

We specialise in providing expert guidance on tax planning and assurance services. Our team can help ensure your business is fully prepared for the Tax Assurance Plan and that you are compliant with all relevant regulations. Contact us today to book a consultation and secure the clarity and support your project needs to succeed.

FAQs

What is the Tax Assurance Plan?

The Tax Assurance Plan allows investors to confirm their tax obligations before starting major infrastructure projects. It aims to reduce uncertainty and avoid costly disputes.

When will the Tax Assurance Plan begin?

The plan is expected to start in mid-2026, offering businesses clarity on their tax obligations well before launching projects.

How does the Tax Assurance Plan benefit my business?

The plan provides early clarity on tax positions, reduces the risk of legal disputes, and makes it easier for businesses to plan their investments with confidence.

What impact will this have on infrastructure projects?

The plan will streamline major projects by removing tax uncertainties, helping businesses move forward with their developments more quickly and with fewer risks.

How can Apex Accountants help with the Tax Assurance Plan?

At Apex Accountants, we offer expert guidance on tax planning and assurance services. Our team can help ensure your business is ready for the new tax assurance plan, saving you time and money.

Book a Free Consultation