Significant changes to Capital Gains Tax (“CGT”) and Inheritance Tax (“IHT”) were announced in the Autumn 2024 UK budget. These changes will impact business owners and future succession planning. Whilst the changes were not as draconian as predicted, they now bring significant additional assets into the taxation regime.

CGT Changes:

- 14% from 6 April 2025.

- 18% from 6 April 2026.

For business owners looking to utilise BADR, there is a time sensitivity for completing disposals before 6 April 2026 and securing favourable rates of CGT of 10% or 14%.

The key change to Inheritance Tax is that business assets will become chargeable for values over £1 Million (lifetime limit). The changes to IHT will have a substantial impact on businesses and future succession, most notably in the circumstance of an unexpected death of a shareholder, the assets that were previously exempt are now being charged to tax.

The importance of forward-thinking estate planning has never been more critical due to the rates of taxation increasing and the likelihood of further rises after April 2026.

It is now essential that all shareholders take pragmatic, professional advice to mitigate future taxation charges. The interaction of CGT and IHT does provide many opportunities but only if carefully considered. We are advising business owners to consider the following:

Working with our colleagues within the tax department the highly experienced Corporate Finance team can assist business owners with their thoughts and plans, including:

If you would like to discuss your financial and strategic plan, do not hesitate to contact our experienced team.