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• CGT annual exemption is £3,000 (for individuals) and £1,500 (for trusts).
• The CGT annual exemption (along with the personal allowance) is forfeited by those claiming the remittance basis.
• Spouses and civil partners can transfer assets between themselves free of CGT.
• Disposals of UK residential property must be reported to HMRC, and CGT paid, within 60 days of completion of contracts.
• Non‑resident landlords (both individual and corporate) should be aware that disposals of UK property will be liable to CGT but it may be possible to rebase the value of the property when calculating the gain.
• UK resident but non‑domiciled individuals should be aware that offshore capital losses will not be allowable unless they make an election when they first claim the remittance basis.
• Business Asset Disposal Relief (BADR) can reduce the rate of CGT due on disposal of qualifying assets and all or part of your business from 20% to 10% on the first £1 million gains. The rate will increase to 14% from 6 April 2025 and 18% from 6 April 2026.
  • The trading business must have been owned, either as a sole trader or in a business partnership, for the last two years.
  • BADR may be available on associated disposals up to 3 years after a business ceases.
  • An employee’s shares or securities in a trading company may also qualify. The shares must have been held for two years, with at least 5% of the share capital, voting rights, and assets on winding up being held.
  • BADR is also available for Enterprise Management Incentive (EMI) shares acquired on the exercise of an EMI option. The company should not be the individual’s personal company and there is no need for the 5% test to be met. There is no need for the individual to have owned the shares for two years, just that the option was granted at least two years before the disposal.

Capital Gains Tax (CGT) – Rates

DA Accountants planning points

• If you are planning on selling an asset, think about putting it into joint names with your spouse / civil partner and utilise their CGT annual exemption / any capital losses.
• If the asset qualifies for BADR, consider accelerating the disposal to before the rate increases.
• Are any of your shares currently of negligible value? If so, a claim can be made to crystallise the capital loss which can then be set against any capital gains.
• If you have sold a business asset, then it may be possible to roll over the gain into a replacement business asset.
• If you are planning on selling your business, or shares in your business, make sure that you have considered the BADR rules, especially if you intend to transfer shares or part of the business to your spouse / civil partner to utilise their BADR entitlement.

Main Rules

• IHT is normally due at 40% on the balance of the individual’s estate, together with any gifts made in the seven previous years, that exceeds the nil‑rate band (NRB) of £325,000.
• An additional exempt amount, the residence nil‑rate band (RNRB) of £175,000, is available if the family home (or share thereof) is left to the deceased’s direct descendants.
• The NRB and RNRB will remain at their current levels until at least 6 April 2028.
• The RNRB is tapered down by £1 for every £2 of value by which the estate exceeds £2,000,000 (i.e. estates worth more than £2,350,000 lose the benefit of the RNRB).
• The percentage of the unused NRB and RNRB can be transferred from the first spouse / civil partner to die to the surviving spouse / civil partner.
• From April 2025, who pays IHT shifted to a residency‑based system, rather than considering domicile status. Long‑term resident individuals will be subject to IHT on their worldwide assets. Non‑resident / short‑term residents will only be subject to their UK situs assets subject to a “tail” of up to 10 years if they leave the UK.
• Transfers of assets between UK‑domiciled spouses or civil partners and from non‑UK‑domiciled individuals to a spouse or civil partner (regardless of domicile), are made free of IHT.
• Where the donor is UK‑domiciled and the recipient spouse or civil partner is non‑UK‑domiciled, the spousal exemption is capped at the same level as the nil‑rate band (currently £325,000) and any gifts in excess of this amount may be subject to IHT.

DA Accountants planning points

• Make sure that your Will reflects your wishes (especially if you have recently married / separated / divorced).
• Think about making lifetime gifts. Provided that you survive seven years from the date of the gift then the value will fall out of your estate for IHT purposes. Do not overlook CGT though which may be due on the gift; the recipient should always consider insuring against this.
• If there are strings attached to a gift (i.e. you give away your house to your children whilst continuing to live in it) then the value of the asset concerned will likely continue to be included in your estate for IHT purposes.
• Take advantage of the annual gift exemption of £3,000 (can be carried forward one year to give £6,000), and small gifts allowance of £250 (to any number of recipients).
• If an IHT liability is anticipated, then think about taking out a life insurance policy written under trust to cover the tax. The annual premium could be funded from income if you have surplus income to your requirements.
• If more than 10% of your net estate is left to charity, then the IHT rate will reduce to 36%.
• Significant changes have been announced regarding Business Property Relief (BPR) and Agricultural Property Relief (APR) from April 2026. Take advice now to see what the impact may be and to plan accordingly.

Inheritance Tax (IHT) – APR and BPR Reforms

• Significant reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR) will take effect from 6 April 2026, fundamentally reshaping inheritance tax exposure for farmers, landowners and business owners. Under the new rules, assets that currently attract 100% relief will instead benefit from 50% relief once their combined value exceeds a new £2.5 million allowance, which replaces the originally proposed £1 million cap. Any unused allowance can be transferred to a surviving spouse or civil partner, enabling couples to shelter up to £5 million of qualifying assets before the reduced rate applies.
• These changes mean that many clients—particularly those with higher‑value farms, estates or privately‑owned businesses—may face materially higher inheritance tax liabilities for the first time. Given the wide‑ranging implications for succession plans, lifetime gifting, trust arrangements and business continuity, clients should begin reviewing their position now. However, there is much to consider before taking action, and the right approach will depend on individual circumstances, asset mix and long‑term objectives. Professional advice is essential to ensure any restructuring, gifting or estate planning is both effective and aligned with personal and commercial priorities.