Inheritance tax planning

Inheritance Tax

Post-Death Planning

Client A had passed away and had an Inheritance tax bill of approximately £1M. Fortunately we were within the statutory time limit to vary the intestacy to reduce the tax bill to Nil.

Comment: Post-death planning should be done as a last resort as the options available to save tax are far less. However, if you are in this position then this tax planning invaluable.

Pre-Death Planning

Client B owned an estate worth around £4,000,000. The Inheritance tax at current rates would have been approximately £1,340,000. Shipleys Tax reorganised his affairs by converting a substantial non-qualifying asset into one which qualified for 100% business property relief, thus removing the inheritance tax liability and ensuring asset protection.

Comment: We would suggest that you review your current Inheritance tax exposure, this will quantify the issue and then if need be, plan to mitigate this tax. There are a number of ways to do this pre-death and these are very cost effective especially against many of the insurance products on the market.

Latest news & blogs…

U-turn by Chancellor on 45p Tax Rate

Inheritance Tax Shipleys Tax Advisors

AFTER A DRAMATIC U-turn the Chancellor has decided to scrap the 45% tax rate. The move was widely criticised amid a cost-of-living and energy crisis and has gathered hugely negative momentum over the course of a few days.

At Shipleys Tax we have the latest on the mini-budget merry go round.

Turning point…

The Chancellor has confirmed that the tax cut will not go ahead, due to the distractions this policy has caused, reversing the announcement only made a few days ago to a lot of fanfare.

Now, from 6 April 2023 those earning over £150,000 will continue to pay the top rate of 45% income tax. However, due to other planned tax cuts, those with income over £150,000 will pay just 38.1% income tax on dividends from 6 April 2023 (currently 39.35%), meaning there will still be an incentive (albeit a smaller one) to delay dividends until on or after 6 April 2023.

The Chancellor is set to announce his medium-term fiscal plan on 23 November.

IR35 to be repealed

Inheritance Tax Shipleys Tax Advisors

IN A QUITE sensational move, Kwasi Kwarteng has seemingly done away with one of the most maligned pieces of tax legislation: the IR35 rules. Or at least some of it.

Here at Shipleys Tax we briefly look at the one of the most surprising aspects of this now quite eventful Mini-Budget.

IR35 repeal

The Chancellor confirmed workers providing their services via an intermediary vehicle, such as a personal service company, will once again be responsible for determining their employment status and paying the appropriate amount of tax and NICs.

The IR35 reforms will be repealed from April 6 2023 according to the mini-Budget.

The previous 2017 and 2021 reforms to the off payroll working rules (also known as IR35) required that the end client, and not the contractors they hire, were responsible in determining if the working relationship resembles a self-employed engagement or employment. Under existing rules, the fee-paying party (either the end client or recruitment agency) shouldered the liability.

This a hugely welcome reform to a much maligned and flawed area of tax law. It brings some certainty as to who is liable and minimises the risk that genuinely self-employed workers are impacted by the underlying off-payroll rules.

IT contractors, locums and many other service professionals will breathe a sigh of collective relief that a piece of legislation that has had a damaging effect on business and contractors’ livelihoods for the last five years has now been repealed.

More to follow.

Mini-Budget 2022: Back in time?

Inheritance Tax Shipleys Tax Advisors

AS PART OF the new government’s mini-budget, the UK chancellor Kwasi Kwarteng travelled back in time to reverse previously planned tax rises by announcing a raft of tax cuts, including a surprising removal of the 45% income tax rate.

We have highlighted the main points below:

Summary Budget measures


IR35/Off-payroll working

Huge change here – the changes made to the off-payroll working rules from April 2017 and April 2021 will be reversed. From 6 April 2023 the responsibility for determining employment status will revert to the individuals doing the work.

  • Income tax
    • 45% Additional rate abolished (40% top rate now)
    • Basic rate cut to 19% (from 20%)
    • both to take effect from April 2023;
    • dividend rate reduced (reversing previous hike)
  • NIC – April 2022 increase in NIC reversed from 6 November and Health & Social Care Levy scrapped
  • Corporation tax to remain at 19% – planned 2023 increase to 25% cancelled
  • Off payroll working/IR35 – previous legislative changes to be repealed from April 2023
  • Introduction of VAT-free shopping for overseas visitors
  • New “Investment Zones” with enhanced tax reliefs and relaxed planning frameworks
  • Removal of cap on bankers’ bonuses
  • SEIS and CSOP limits to be increased. EIS and VCT reliefs will be extended beyond 2025
  • Annual Investment Allowance to stay at £1m for capital allowances
  • No stamp duty on first £250,000, for first time buyers that rises to £425,000 – comes into operation today

Our in-depth analysis of the Mini Budget will follow.


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