Experts at property tax matters, advising you on the most tax efficient manner to arrange your property transactions
Property
Property businesses garner high risks as well as great rewards.
Whether you are a property developer, investor, agent, or in the construction industry, you need a trusted professional to steer you through the complexities of legislation and maximise your investment.
At Shipleys Tax, we offer you a comprehensive support package which can be tailored to the service you need.
- Services for developers
- Services for investors
- Professionals working in the property sector
- Services for property agents
To help you build and keep more of your investment from the taxman why not contact us now and seen how we can help?
Capital Allowances
When you buy, lease or improve a commercial property, HMRC allows you to offset some of that expenditure for tax purposes. Your advisors have probably claimed for the more obvious features, but as capital allowance specialists we dig much deeper to make significant additional claims on your behalf.
Typically, we identify Capital Allowances of between 10% and 30% of the commercial property purchase price.
We use specialist surveyors with tax expertise, to visit your property to uncover this extra layer of allowable items. This service is relevant for two types of clients:
1. Commercial property owners and investors who can retrospectively claim for unused allowances, (going back many years in some cases), for alterations, extensions and upgrades to their buildings.
2. Buyers and sellers of commercial property who need to agree a value for plant and machinery as part of the purchase process.
LATEST POSTS
Making Tax Digital Is Live: What Sole Traders & Landlords Need To Do To
Making Tax Digital
Making Tax Digital Is Live: What Sole Traders & Landlords Need To Do
Making Tax Digital
HMRC’s MUCH VAUNTED Making Tax Digital (MTD) for Income Tax went live on 6 April 2026, and the first quarterly deadline has already been and gone. This represents a major shift in income tax reporting in the UK and is not without controversy. If you’re a sole trader or landlord with income over £50,000, the new HMRC digital reporting rules will apply to you. What many have been putting off is now the system you are actually working under – not a future date on the calendar.
In today’s Shipleys Tax brief we look at the general impact of these changes and what needs to be done to avoid falling foul of the new system despite promises of a soft touch by HMRC.
What’s actually changing
From 6 April 2026, sole traders and landlords with qualifying income over £50,000 must keep digital records and send quarterly updates to HMRC using MTD compatible software. Qualifying income is gross turnover from self-employment and property combined, before expenses, based on the tax return already submitted for 2024-25. The familiar annual Self Assessment return is being phased out for this group, replaced by four quarterly updates plus a Final Declaration.
From 6 April 2026, sole traders and landlords with qualifying income over £50,000 must keep digital records and send quarterly updates to HMRC using MTD-compatible software.
The first deadline has already passed
The four quarterly deadlines for 2026/27 fall on 7 August 2026 (covering 6 April to 5 July), 7 November 2026, 7 February 2027 and 7 May 2027, with a Final Declaration due by 31 January 2028 replacing the old tax return deadline. That first deadline, 7 August, was six days ago. Anyone required to be in the regime who hasn’t yet submitted a Q1 update needs to check their position now, rather than waiting for the next one to catch up.
HMRC will start signing people up from September
HMRC confirmed on 12 August 2026 that more than 436,000 sole traders and landlords have now successfully sent their first MTD quarterly update, with over 570,000 customers signed up to the service overall. From September 2026, HMRC will begin signing up customers who should be using MTD for Income Tax for 2026/27 but haven’t done so themselves, working through them in stages over the following months. Anyone who signs up voluntarily now avoids being contacted this way and keeps control over the timing and software choice.
From September 2026, HMRC will begin signing up customers who should be using MTD for Income Tax for 2026/27 but haven’t done so themselves.
The Association of Taxation Technicians has previously flagged that around 850,000 landlords and sole traders were expected to come into MTD from April 2026, and that roughly a quarter of those affected don’t have an agent to help them through it. As Jon Stride, chair of the ATT’s Technical Steering Group, put it when the first-year penalty easement was announced: “those trying their best to comply but struggling shouldn’t be penalised” – but that goodwill doesn’t extend to simply not signing up at all.
The new penalty regime
Alongside MTD, HMRC is introducing a points based penalty system, moving away from the immediate fixed penalty approach used under standard Self Assessment. Quarterly filers accumulate a penalty point for each late submission; once four points are reached, a £200 penalty applies, followed by another £200 for each further late submission until compliance improves. Points expire automatically after 24 months if the threshold isn’t hit again. Late payment penalties are also tightening: 3% of tax overdue at 15 days, another 3% at 30 days, and 10% a year accruing daily on anything still outstanding after 31 days.
Once four points are reached, a £200 penalty applies, followed by another £200 for each further late submission until compliance improves.
Why this catches people out
The “soft landing” HMRC has publicised for 2026/27 – no penalty points for late quarterly updates in the first year – has led some taxpayers to assume nothing is enforced yet. That’s not quite right: the soft landing only covers points for late quarterly updates. Penalties for a late tax return or late payment of tax still apply in full from day one. There’s also confusion over qualifying income itself – it’s gross turnover before expenses, and it’s based on last year’s return, not current-year figures. Anyone running both a trade and a rental property should check the combined figure rather than assuming each income source is judged separately.
The soft landing only covers points for late quarterly updates. Penalties for a late tax return or late payment of tax still apply in full from day one.
What to check now
The threshold isn’t static either – it drops to £30,000 from April 2027 (based on 2025-26 income) and to £20,000 from April 2028 (based on 2026-27 income), pulling in a much wider group of sole traders and landlords over the next two tax years. Worth checking now, even if this year’s income sits comfortably under £50,000: confirm your qualifying income against last year’s return, get MTD-compatible software in place well before you’re required to use it, and if the 7 August update has been missed, get it submitted rather than letting a second deadline pass.
The shift to quarterly digital reporting is a genuine change in how HMRC expects records to be kept, not just a filing-date reshuffle. Getting the software and habits right now, while the penalty regime is still in its soft-landing year, is considerably easier than catching up once points start accumulating.
For further assistance or queries, please contact us.
Leeds: 0113 320 9284 Sheffield: 0114 272 4984
Email: info@shipleystax.com
Please note that Shipleys Tax do not give free advice by email or telephone. This article is intended for general information only and does not constitute tax or legal advice. Clients should seek professional guidance before making any decisions.
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This article is for general information only and does not constitute professional advice. Please seek qualified tax advice before taking any action.
The Pensions Inheritance Tax Trap
Inheritance Tax Planning
The Pensions Inheritance Tax Trap
Inheritance Tax Planning
FOR YEARS, PENSIONS have been one of the few places a family could pass on wealth without inheritance tax getting involved. From April 2027, that changes. If your own planning assumed your pension sat outside your estate, it’s worth checking whether that’s still true.
What’s Actually Changing
The Finance Act 2026 received Royal Assent on 18 March 2026. From 6 April 2027, most unused pension funds and death benefits will count towards the estate for Inheritance Tax, taxed at 40% above the nil-rate band.
From 6 April 2027, most unused pension funds and death benefits will count towards the estate for Inheritance Tax, taxed at 40% above the nil-rate band.
There are exceptions: death-in-service payments from a registered scheme remain exempt, as do transfers to a surviving spouse or civil partner. What’s new is the administrative burden too — personal representatives become responsible for reporting and paying any IHT due on pension funds, adding a layer of complexity to estate administration that many families haven’t planned for.
Why This Catches People Out
The pension change doesn’t arrive in isolation — it lands on top of a set of thresholds that have been quietly tightening for years. The standard nil-rate band has been frozen at £325,000 since 2009. The residence nil-rate band tapers away entirely for estates above £2 million. And UK IHT liabilities passed £7 billion for the first time this year (STEP, 30 July 2026).
Put together, a pension that used to sit safely outside the estate now adds directly to a total that’s already being squeezed from every other direction.
A pension that used to sit safely outside the estate now adds directly to a total that’s already being squeezed from every other direction.
Who Should Be Reviewing Their Position Now
- Anyone with a meaningful pension pot they expect to pass on to family
- Estate plans built on the assumption that the pension sat outside the taxable estate
- SIPP or SSAS holders, where pension values can be substantial and flexible
- Couples relying on outdated first-death/second-death assumptions that predate this change
A Sense of Proportion
It’s worth saying plainly: fewer than 1 in 20 estates currently pay any Inheritance Tax at all (Today’s Wills and Probate). This isn’t a change that suddenly affects everyone.
Fewer than 1 in 20 estates currently pay any Inheritance Tax at all.
But frozen thresholds, rising asset values, and pensions joining the estate from 2027 mean more families are being pulled into that minority every year — often without realising it until it’s too late to plan around.
If your own planning assumed a pension sat outside your estate, that assumption has changed. The only way to know where you actually stand is to look at the full picture — property, savings, pensions and reliefs together.
Check your position with our free, private IHT Wealth Health Check. It takes a few minutes, saves your progress if you need to come back to it, and gives you an indicative estimate by secure link.
Start your Wealth Health Check →
Final Thoughts
The pension rule change doesn’t mean every family needs to act immediately, but it does mean an assumption a lot of estate plans were built on no longer holds. A short review now — before April 2027 — is a much better position to be in than finding out after the fact.
A short review now — before April 2027 — is a much better position to be in than finding out after the fact.
For further assistance or queries, please contact us.
Leeds: 0113 320 9284 Sheffield: 0114 272 4984
Email: info@shipleystax.com
Please note that Shipleys Tax do not give free advice by email or telephone. This article is intended for general information only and does not constitute tax or legal advice. Clients should seek professional guidance before making any decisions.
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This article is for general information only and does not constitute professional advice. Please seek qualified tax advice before taking any action.
Dubai-UK Tax Trap: Return of the Expat
International Tax
Dubai-UK Tax Trap: Return of the Expat
International Tax
RECENT WARNINGS FROM advisers highlight a growing issue affecting UK expats returning from Dubai and the wider Gulf. Individuals who believed they had legitimately realised gains while non-resident are now facing unexpected UK tax bills—sometimes running into millions.
In today’s Shipleys Tax brief, we highlight a growing and often misunderstood risk for UK expats returning from Dubai and the Gulf: the UK’s temporary non-residence rules can effectively pull previously untaxed overseas gains back into the UK tax net. What appeared to be a clean, tax-free disposal abroad can quickly turn into a multi-million pound liability on return—particularly where individuals come back within five years or inadvertently trigger UK residence sooner than expected.
With HMRC likely to scrutinise high-value cases closely and limited reliance on “exceptional circumstances”, the margin for error is small. The key message is that timing, structure and residence status must be managed proactively—because once you are back in the UK, the planning window is often already closed.
…the UK’s temporary non-residence rules can effectively pull previously untaxed overseas gains back into the UK tax net.
Why Expats are affected
At the centre of the problem is a rule many people either misunderstand or are simply unaware of: the UK’s temporary non-residence rules. These are designed to prevent individuals from leaving the UK for a short period, disposing of valuable assets tax-free in low-tax jurisdictions such as Dubai, and then returning shortly afterwards.
In general terms, if you leave the UK, become non-resident, and then return within five tax years, HMRC can effectively “look back” and tax certain gains you made while abroad. The result is that a disposal which appeared entirely tax-free at the time can later fall back into the UK tax net.
The real-world impact
This is where many expats are being caught out. A common scenario involves the sale of a business or investment during a period of non-residence—often with no local tax in the UAE. However, if the individual returns to the UK too soon, those gains can be taxed here, typically in the year of return.
For larger transactions, the numbers quickly become significant. It is not unusual for individuals to face tax charges in the millions on gains they assumed were outside the UK system.
UK return tax issue
The position is made more complex by the Statutory Residence Test. Simply returning to the UK—even for reasons outside your control—can increase your UK “day count” and trigger tax residence earlier than expected.
A common scenario involves the sale of a business or investment during a period of non-residence—often with no local tax in the UAE. However, if the individual returns to the UK too soon, those gains can be taxed here, typically in the year of return.
Once UK residence is re-established, the temporary non-residence rules may apply. This means the timing of your return is often just as important as the transaction itself.
Case Study 1: £5m Exit → Unexpected UK Tax Charge
A UK entrepreneur moves to Dubai and becomes non-UK resident. During their time abroad, they sell their business for £5 million, realising a full £5 million gain with no local tax. Confident the position is tax-free, they return to the UK after three years. However, because they have not remained non-resident for five full tax years, the UK’s temporary non-residence rules apply. The gain is effectively brought back into the UK tax net and taxed in the year of return, creating a potential liability of around £1.2 million (at 24% CGT, assuming no reliefs). The issue is not the disposal itself—but the timing of the return.
Case Study 2: Extracting £100,000 from a UK Company While Abroad
An individual leaves the UK and becomes non-resident, while retaining ownership of a UK company. During their period overseas, they extract around £100,000 of profits from the company, assuming this can be done free of UK tax while living in Dubai. They later return to the UK within five years.
Because of the temporary non-residence rules, certain income received during the non-resident period can be caught when the individual becomes UK resident again. HMRC may treat those amounts as taxable in the year of return, meaning what was assumed to be tax-free extraction could instead give rise to an unexpected UK income tax liability. As with capital gains, the risk arises not at the point of extraction—but on returning to the UK within the five-year window.
Exceptional Circumstances
Some individuals have looked to rely on the “exceptional circumstances” provisions, which can allow up to 60 days in the UK to be disregarded where events such as war or travel disruption prevent someone from leaving.
However, this is not a ready made guaranteed solution. HMRC apply rules narrowly and it depends heavily on the specific facts. Where alternative travel options exist—such as relocating temporarily to another country rather than returning to the UK—HMRC may take the view that the exemption does not apply.
In practice, relying on this argument carries risk, particularly where large tax liabilities are involved.
A growing risk
In the current climate, this creates real uncertainty. Many expats have returned to the UK due to instability in the region, while others are considering whether to do so.
The difficulty is that the tax consequences are not always clear-cut, and HMRC is likely to examine high-value cases closely—especially where significant gains have been realised during a short period of non-residence.
Planning before your return
From a practical perspective, this is rarely a situation that can be resolved after the event. The timing of your return, your residence position, and the structure of any disposals all interact in ways that can significantly change the outcome.
In some cases, careful planning—such as delaying a return, restructuring transactions, or considering an interim move to a third country—can materially reduce the risk.
Key takeaway
Leaving the UK does not automatically mean your gains are outside the UK tax system. If there is any possibility of returning within certain time limits, those gains may still be within HMRC’s reach.
Need advice?
If you may have exposure to UK tax while living in Dubai or the Gulf—or are looking to optimise your position—it is essential to review your UK tax affairs before taking any action.
This article is for general information only and does not constitute professional advice. Shipleys Tax does not provide free advice by email or phone. You should seek tailored advice before taking any action.
For further assistance or queries, please contact us below:
Leeds: 0113 320 9284 Sheffield: 0114 272 4984
Email: info@shipleystax.com
To discussion your tax position with a specialist please the complete the form below.
This article is for general information only and does not constitute professional advice. Please seek qualified tax advice before taking any action.
VAT Refund for Doctors – A rare win
Healthcare Tax
VAT Refund for Doctors – A rare win
Healthcare Tax
A significant VAT development for organisations using or supplying locum doctors
A recent tribunal decision, followed by HMRC accepting that it will revise its policy, has created a genuine opportunity for some organisations to revisit the VAT treatment of locum doctor supplies. For the right fact patterns, this may support historic refund claims. But this is not a blanket refund exercise, and the detail matters.
This issue can affect medical recruitment agencies, NHS bodies, private hospitals, clinics and other healthcare organisations that have either charged VAT on supplies of locum doctors or borne irrecoverable VAT on those supplies.
This article is for general information only and does not constitute professional advice. Please seek qualified tax advice before taking any action.
