On Tuesday 3 March 2026, Chancellor Rachel Reeves delivered the Spring Statement, providing an update on the government’s economic outlook at a time of continued global uncertainty. While no new tax or spending measures were announced, the Statement offers insight into how existing policies are expected to shape the UK economy over the coming years.

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The forecasts underpinning the Statement do not account for potential risks arising from conflict in the Middle East, including potential impacts on global energy prices and supply chains, and was delivered against a backdrop of shifting energy markets and tightened fiscal conditions. However, the Chancellor reaffirmed the government’s commitment to holding a single fiscal event each year and maintaining tight control of the public finances.

Economic growth has been revised down for 2026, with GDP now expected to increase by 1.1%, compared with a previous forecast of 1.4%. Growth is further expected to strengthen to 1.6% in both 2027 and 2028, before stabilising at around 1.5% in 2029 and 2030.

Inflation is forecast to fall to 2.3% in 2026 and return to the Bank of England’s 2% target from 2027 onwards. As a result, households are expected to be more than £1,000 a year better off after accounting for inflation. The government reiterated its focus on supporting minimum wage, expanded childcare provisions, and the removal of the two-child benefit cap.

Public sector borrowing is now forecast to be £18 billion lower than estimated at the Autumn Budget, with borrowing expected to fall from 4.3% of GDP this year to 1.8% by 2029-30. Fiscal headroom has increased to nearly £24 billion, the highest level since the Autumn Budget. Unemployment is expected to peak at 5.3% in 2026, before falling steadily to 4.1% by 2030.

Overall, the Spring Statement paints a picture of cautious optimism, highlighting gradual improvements in the public finances and living standards, but it also underlines that the outlook for growth remains modest and that difficult decisions on tax and spending are likely to persist in the years ahead. The accompanying OBR report reinforces the message that, while some indicators are moving in a more positive direction, there is little room for complacency.

This summary provides a detailed commentary, which sets out the key announcements and their implications. The summary also includes details of previously announced tax measures that take effect in the coming years, together with their impact across personal taxation, business taxes, employment, pensions and capital taxes.

If you would like to discuss any aspect of the Spring Statement or how it may affect your circumstances, please do not hesitate to contact us.

As we approach the end of the 2025/26 tax year, now is the ideal time to review your personal tax position and assess whether you are making full use of the reliefs and allowances available. The UK tax landscape continues to evolve, and proactive planning ahead of 5 April 2026 can make a meaningful difference to your overall tax efficiency.

Below is a summary of key year end planning opportunities for individuals, families, and business owners.

1. Income Tax Planning

Use your personal allowance

If your income is below the personal allowance (£12,570), consider whether income can be transferred or reallocated within a family (e.g., through jointly held investments) to make full use of available allowances.

Managing the 60% effective tax rate

Income between £100,000 and £125,140 is subject to an effective 60% tax rate due to the tapering of the personal allowance. Planning strategies include:

• Making pension contributions
• Gift Aid donations
• Deferring income where possible

Dividend and savings allowances

The dividend allowance and savings allowances remain valuable tools:

• Dividend allowance: £500 for 2025/26
• Personal savings allowance: £1,000 (basic rate), £500 (higher rate), £0 (additional rate)

Consider whether dividends or interest can be timed to fall in the most tax efficient year.

2. Capital Gains Tax (CGT) Planning

Use your annual CGT exemption

The annual exemption remains at £3,000 for 2025/26. If you do not use it before 5 April, it is lost.

Strategies include:

• Crystallising gains up to the allowance
• Rebalancing investment portfolios
• “Bed and ISA” or “Bed and spouse” transactions, ensuring anti avoidance rules are observed

Review your investment portfolio

With different CGT rates applying to residential property and other assets, it is important to consider whether gains should be realised now or deferred depending on your wider tax position.

3. Pension Contributions

Pensions remain one of the most tax efficient planning tools.

Maximise your annual allowance

The standard annual allowance is £60,000, subject to tapering for high earners. You may also be able to use carry forward from the previous three tax years.

High earners

If your adjusted income exceeds £260,000, your annual allowance may taper down to as little as £10,000. Making contributions before year end can:

• Reduce your income tax
• Restore your personal allowance
• Lower exposure to the child benefit charge

Lifetime allowance abolition

Although the lifetime allowance has been abolished, new lump sum limits apply. Pension strategies should be reviewed to ensure they remain aligned with the revised framework.

4. ISAs and Other Tax Efficient Investments

Use your ISA allowance

Each individual can invest up to £20,000 into ISAs in 2025/26. Growth and withdrawals are tax free.

Junior ISAs

Up to £9,000 can be invested for each child.

Venture Capital Schemes

For suitable investors:

• EIS: 30% income tax relief, CGT deferral
• SEIS: 50% income tax relief
• VCTs: 30% income tax relief, tax free dividends

These carry higher risk and should be considered carefully.

5. Inheritance Tax (IHT) Planning

Annual gifting allowances

Before 5 April, consider using:

• Thee £3,000 annual exemption
• Small gifts of up to £250 per person
• Regular gifts out of surplus income

Review your estate plan

With frozen thresholds and rising asset values, more estates are being drawn into inheritance tax. Reviewing wills, trust arrangements, and life insurance  can help manage future liabilities.

6. Family Tax Planning

Marriage allowance

If one spouse earns below the personal allowance and the other is a basic rate taxpayer, up to £1,260 of allowance can be transferred.

Children and investments

Income from parental gifts to children is taxed on the parent if it exceeds £100 per child per year. Using grandparents or Junior ISAs can be more efficient.

7. Property Owners

Mortgage interest relief for landlords

Landlords should understand the impact of the basic rate restriction on mortgage interest and consider whether incorporation or restructuring could improve tax efficiency.

Principal private residence relief

If you are planning to sell your home, ensure occupation patterns and elections (for those with multiple properties) are up to date.

8. Business Owners and Directors

Dividends vs salary

Review the most tax efficient extraction strategy before year end.

Company pension contributions

Employer contributions can be highly efficient and reduce corporation tax.

Capital allowances

If your business is planning capital expenditure, timing it before year end may accelerate tax relief.

9. Charitable Giving

Gift Aid donations made before 5 April can:

• Reduce your income tax
• Potentially restore your personal allowance
• Be carried back to the previous tax year if made before filing your return
• Consider making larger donations in traches

10. Review Your Tax Code and Payments on Account

Unexpected underpayments often arise from incorrect tax codes. Year end is a good time to check your coding notice and review whether payments on account for 2025/26 are appropriate.

Final Thoughts

Year end tax planning is most effective when tailored to your personal circumstances. The rules continue to evolve, and the freezing of many allowances means more individuals are being drawn into higher tax brackets. Taking action before 5 April 2026 can help you protect your wealth, reduce unnecessary tax exposure, and plan confidently for the year ahead.

Dixcart UK

At Dixcart UK, we recognise that every client’s situation is unique, and we are committed to delivering personalised solutions that address your specific objectives and concerns. In an increasingly complex and regulated tax environment, having the right guidance and support is essential. 

For more information, or to talk to us about how we can assist you, please contact: advice.uk@dixcart.com.

On Wednesday 26 November, Chancellor Rachel Reeves delivered her second Autumn Budget focusing on raising revenue through tax freezes and targeted levies, whilst increasing welfare support and minimum wage to address the cost-of-living pressures.

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Against a backdrop of modest economic growth (forecast at 1.5%) and easing inflation, the Government has chosen to maintain frozen Income Tax and National Insurance thresholds until 2030/31, thus extending fiscal drag as a key revenue driver. New measures, including a High Value Council Tax Surcharge on homes over £2 million and a mileage charge for electric vehicles from April 2028, signal a shift toward broadening the tax base.

On the social front, the removal of the two-child benefit cap and an uplift in the state pension reflect efforts to tackle inequality and support vulnerable groups. The National Living Wage will rise to £12.71 per hour from April 2026, reinforcing the commitment to improving living standards. Public services benefit from a freeze on rail fares and an extension of the sugar tax to milk-based drinks, aimed at cost-of-living relief and public health.

Overall, the Budget highlights a long-term trend toward higher taxation which, is expected to reach 38% of GDP by 2030, while preserving fiscal headroom for future challenges.

More details of the specific measures can be found in our Budget Summary.

To find out how we can help your business, or if you have any questions regarding the 2025 Autumn Budget, please contact us.

Among the many rumours surrounding the upcoming 2025 Budget, proposed changes to the UK’s Inheritance Tax regime have dominated the headlines.

While any discussion at this stage remains speculative, several potential reforms have been reported in the press, including:

• Lifetime gifting cap: the Government is reportedly considering a lifetime cap on the value of gifts that can be made free of IHT. Currently, gifts to individuals of any amount are potentially exempt if the donor survives for 7 years.
• Changes to the 7-year rule: the time frame for potentially exempt transfers could be extended beyond 7 years, with some commentators suggesting a period of 10 or even 14 years.
• Reform of gifting exemptions:  Reviews or potential restrictions could be introduced for existing exemptions, such as the £3,000 annual gift allowance.
• Further changes to reliefs: the Government may continue to restrict or remove other IHT reliefs, especially if they are deemed unfair or costly to the taxpayer.
• Flat-rate IHT: some analysts suggest the Government may consider a simplified flat-rate IHT regime, potentially replacing the current ‘cliff edge’ 40% rate with one applied more broadly.

The rumoured changes are in addition to those already announced, which include:

• New residency-based tax system: since 6 April 2025, the non-dom regime has been abolished and replaced with a residence-based system. This could bring the worldwide assets of long-term UK residents within the scope of IHT after only 10 years of residence.
• Changes to business and agricultural relief: from April 2026, Business Property Relief (BPR) and Agricultural Property Relief (APR) at the rate of 100% will be capped at a combined value of £1 million. Assets with a value above this amount receive relief at 50%.

• Changes to pensions from April 2027: most unused pension funds will form part of an individual’s taxable estate for IHT purposes. While the rules are still to be confirmed, this represents a very significant shift, as private pensions have historically been exempt from IHT.
• Thresholds frozen until 2030: the nil-rate band of £325,000 and the residence nil-rate band of £175,000 have been frozen until at least April 2030. Due to inflation and rising asset values this will bring more estates into the IHT net.

Possible pre-Budget actions

If you have significant pension savings, own a business, or hold agricultural assets, you should consider reviewing your estate planning arrangements.

Key considerations should include:

• Review your Will or Draft one if you do not have one: your Will can be structured to maximise allowances, especially given the new cap on BPR and APR and its “use-it-or-lose-it” nature for spouses and civil partners.
• Consider lifetime gifts: given the rumoured changes to the gifting rules, consider making gifts sooner rather than later to start the 7-year clock under the current regime.
• Reassessing your pension strategy: in conjunction with taking financial advice, you may consider spending pension funds in priority to other monies and examine other strategies to reduce the impact of the April 2027 changes.
• Reviewing the tax exposure of any family trusts: the new cap on reliefs will significantly affect both existing and new trusts.
• Assess Investments:  Investors may wish to review holdings such as AIM shares, which may currently benefit from reduced rates of Business Property Relief (BPR).

For more information about the upcoming Autumn Budget, please contact us: advice.uk@dixcart.com.

When the UK ended its non-domicile tax regime in April 2025, the change was more than just a technical tax reform, it was a signal that the country’s relationship with global wealth had fundamentally shifted. For over a century, the non-dom rules allowed internationally mobile individuals to limit their UK tax exposure; that framework has now gone.

The New Residence-Based Reality

The UK now taxes residents on a worldwide basis. The moment you become UK resident, your global income and gains are subject to UK tax, and after a certain period, your worldwide assets may also be liable for inheritance tax.

This shift does not just affect the ultra-wealthy; it affects anyone with assets abroad, property back home, or business interests overseas. Transitional measures exist, but they are temporary.

Why Your Will Matters More Now

In the non-dom era, estate planning often relied on trusts, offshore structures, or the remittance basis to manage exposure. Today, those tools are more limited. That makes the Will more than a formality but a central tool in making sure your wealth is passed on according to your wishes.

The Three Essential Functions of a Will Today

In the post-non-dom UK, a Will does three things:

1. It defines the narrative of your estate in a way the law cannot: who inherits what, in which jurisdiction, and under what conditions.
2. It gives your executors the framework to navigate cross-border probate and the complexities of conflicting inheritance laws.
3. Perhaps most importantly, it allows you to respond directly to the new tax environment, such as structuring bequests, timing disposals, and integrating reliefs so that value passes as intended, not as dictated by the blunt force of intestacy rules.

The reality is that HMRC now has a much broader claim on the wealth of UK residents. Without a Will, that claim will be exercised with maximum inefficiency and minimum alignment to personal wishes. The state decides how your estate is divided, often in ways that are inefficient and misaligned with your wishes.

We are entering a period where private wealth structuring will need to be far more deliberate. Those with international ties will have to think globally but act locally, drafting Wills that respect multiple legal systems, anticipating not just the tax burden but the human dynamics of succession. In this context, the Will is no longer the final step in managing your affairs; it is the foundation.

What We Do

Our private client consultants offer a service tailored to our clients’ unique needs. Whether you simply need a Will to cover your UK assets or a more detailed one that includes tax planning or trust arrangements, we will tailor it to fit your personal needs and circumstances.

At Dixcart UK, we recognise that every client’s situation is unique, and we are committed to delivering personalised solutions that address your specific objectives and concerns.

For more information about Wills, please contact us: advice.uk@dixcart.com.

Planning the future of your wealth is not just about tax efficiency or legal structures; it is about protecting what matters most and creating a legacy that reflects your values. Thoughtful estate planning gives you the confidence that your assets are not only safeguarded but also positioned to benefit your family in meaningful ways. It allows you to take control of how your wealth is transferred, ensuring it supports the next generation while minimising unnecessary risks or taxes.

Below are some of the main tools used in estate planning, along with the benefits they can offer.

1. Family Investment Companies (FICs)

A Family Investment Company is a private company used to hold and manage family wealth. They allow individuals to transfer assets from their personal estates into a corporate structure while retaining control over those assets, including decisions about the board’s composition

However, it is more than just a holding vehicle. If the Founders lend money to the FIC, the loan can be gradually repaid using the FIC’s post-tax profits, alongside any dividends distributed from its earnings. This arrangement can offer the Founders a continuous stream of income.

Alternatively, if the loan’s capital is no longer required, the Founders may choose to gift its value to other family members. This would remove the loan’s value from their taxable estate for Inheritance Tax purposes, provided they survive for seven years following the date of the gift.

There are a number of potential tax advantages when using FICs, including Inheritance Tax, but these will vary depending on the size of the investments/loans, the assets held by the FIC, and the personal circumstances of the Founders. It is therefore very important to speak with a tax specialist from the outset, who can provide guidance on the tax merits of an FIC, tailored to the specific circumstances and objectives of each prospective Founder.

2. Trust Structures

They provide a structured framework for aligning wealth transfer with long-term family goals and values, enabling trustees to manage and distribute assets in a purposeful and strategic manner. At the same time, trusts can offer resilience against divorce settlements, creditor claims, or imprudent financial decisions, while facilitating a seamless transfer of assets that avoids the delays and public scrutiny of probate. When integrated into a comprehensive strategy, trusts can also enhance tax efficiency, helping to reduce exposure to inheritance and capital gains taxes while preserving the integrity of the family legacy.

Trusts can be established during a person’s lifetime or through a Will, with assets transferred to trustees who manage them for the benefit of the chosen beneficiaries.

3. Lifetime Gifting

Lifetime gifting is a further strategy that combines financial efficiency with relational impact. By transferring assets during one’s lifetime, families can reduce the eventual taxable estate. Gifting also allows for a gradual transfer of wealth, mitigating sudden disruptions to family financial dynamics and fostering financial literacy across generations.

Gifts made sufficiently in advance may fall outside the estate for inheritance tax purposes, amplifying the long-term efficiency of such transfers.

4. Comprehensive Tax Planning

At the foundation of all these strategies lies comprehensive tax planning. Coordinating personal, family, and business finances in a holistic manner is essential for preserving and growing wealth. Effective planning ensures that all available allowances and reliefs are maximised, strategically reduces exposure to income tax, capital gains tax, and inheritance tax, and, for internationally connected families, mitigates the risk of double taxation.

About us

Dixcart UK has extensive experience in designing bespoke estate plans for a wide range of clients, including families, entrepreneurs, and both UK and non-UK domiciled individuals. No two situations are the same, which is why we take the time to understand your personal, business, and family priorities before creating a strategy tailored to your needs.

For more information about the above topic, please contact us: advice.uk@dixcart.com.

Companies House will introduce new legal requirements for identity verification for company directors and people with significant control (PSCs) from Tuesday 18 November 2025. However, anyone can choose to verify their identity now during the voluntary phase.

Identity verification (“IDV”) is the process of confirming that a person is who they claim to be. The aim of the IDV regime is to reduce the risk of fraud by making it harder to register fictitious directors and beneficial owners and to improve the integrity and accuracy of the public record at Companies House.

Who needs to have their identity verified?

• New directors will need to verify their identity before they can incorporate a company or be appointed to an existing company.

Existing directors will need to confirm their identity has been verified when filing their next annual confirmation statement, during a 12-month transition period.

• Existing PSCs must verify their identity in line with an appointed date to be confirmed, also within the same year long period.
• Anyone on behalf of a company (e.g. company secretaries)
• Members of LLPs and other registration types

Individuals listed on multiple entities only need to verify their identity once.

The new IDV requirements will also apply to individual directors of overseas companies that have a UK establishment registered at Companies House. The timing of implementation will be the same as for UK companies but with specific transitional provisions for existing directors of overseas companies.

Implementation Timeline

• 8 April 2025: voluntary IDV for individuals was introduced
• 18 November 2025: IDV will become compulsory. A 12-month transition period will also begin in respect of existing directors, LLP members and PSCs
• Spring 2026: IDV will become compulsory for those filing documents at Companies House. Any third parties who are filing on behalf of a company will need to register as an authorised corporate service provider (“ACSP”)
• By the end of 2026: the 12-month transition period will end, and Companies House will start compliance checks.

These measures are part of a wider effort to tackle fraud, prevent the misuse of companies, and improve the accuracy of the companies register, providing investors, regulators and the wider business community with greater confidence about who controls UK companies.

Companies House estimates that between 6 and 7 million individuals will need to complete the identity verification process by November 2026. Since the soft launch in April 2025, over 300,000 individuals have already completed the process voluntarily.

To avoid delays, possible penalties, or rejection of company filings, we recommend beginning the process as soon as possible.

Speak to an Expert

We take the hassle out of the identity verification by managing the process for you with care and reliability. If you would like to speak with a member of the team, please get in touch: hello@dixcartuk.com.

Last month, Bloomberg reported that despite the abolition of the UK non-dom regime and the looming prospect of wealth taxes, London remains a magnet for family offices.

Over the past decade, family offices have become increasingly international. Many now operate across multiple jurisdictions, both to diversify risks and to tap into opportunities in emerging markets. Yet, despite this global outlook, London has retained its gravitational pull. While some wealthy residents have indeed departed, data shows that very few family offices have actually uprooted their operations. According to Bloomberg, out of 259 single-family offices managing a combined $344 billion, only one has relocated alongside its principal. Even among the 19% of non-dom owners who are preparing to leave the UK, their offices remain firmly based in the capital.

It is not hard to understand why family offices have continued to stay fixed in London – their effectiveness relies on having the right advisers to ensure the family office runs as efficiently as possible, and the UK’s long-standing status as a global financial center, with a robust ecosystem of professional services, plays a huge role in that decision.

So why does London hold on so tightly to this community, even amid political uncertainty?

Several factors stand out:

• Depth of Expertise – Family offices thrive when they can draw on top-tier advisers across law, tax, investment, and governance. London’s professional services sector has built decades of global credibility and continues to offer unparalleled expertise.
• Global Financial Hub – The UK’s long-standing reputation as a stable, well-regulated financial centre makes London an attractive base for intergenerational wealth planning and cross-border structuring.
• Connectivity – With direct links to Europe, the Middle East, Asia, and North America, London provides unrivalled access to global markets and networks of capital.
• Cultural and Lifestyle Appeal – Beyond finance, London’s educational institutions, property market, and cultural life remain strong draws for international families.

Taken together, these advantages create a powerful ‘ecosystem effect’.

It is encouraging to see that London’s family office sector continues to thrive and evolve despite a backdrop of policy changes and uncertainty. For families thinking about their long-term strategies, the message is clear: location matters, and the right infrastructure can often outweigh political changes.

At Dixcart we have over fifty years’ family wealth planning experience and assist clients in running and managing Family Offices. For more insights, see our article on Effective Family Wealth Planning.

If you would like tailored advice on succession planning or a comprehensive approach to managing family wealth, please speak to your usual Dixcart professional or contact a member of our professional team at our UK office: advice.uk@dixcart.com.

From January 2026, UK taxpayers who use crypto-assets will face new reporting obligations under regulations aligned with the OECD’s Crypto-Asset Reporting Framework (CARF). Announced by HMRC on 24 June 2025, these rules require crypto service providers to collect and report detailed personal and transactional data for users who are UK residents or residents of other CARF-compliant jurisdictions.

What’s Changing?

Although crypto-assets have always been subject to UK tax laws, including capital gains tax and potentially income tax, this new regulation shifts some of the reporting burden to crypto-asset platforms such as exchanges, wallet providers, and brokers. For the first time, these service providers must proactively report their users’ information directly to HMRC however tax payers will be responsible for providing certain  information to the service providers to allow to report back to HMRC.

From 1 January 2026, the following data must be collected and submitted by crypto-asset service providers:

• Full name
• Address
• Date of birth
• Tax residence(s)
• National Insurance number or unique taxpayer reference
• Summary of crypto transactions (e.g., sales, transfers, exchanges)

Failure by the tax payer to provide accurate and complete information to the service provider or failing to report altogether, could result in penalties of up to £300 per user, applicable to both users and service providers.

Increased Compliance

HMRC will use this data to cross-check taxpayers’ self-assessment returns, ensuring that income and gains from crypto-assets are reported correctly. In cases where no tax return is submitted, HMRC may use the data to estimate and assess the tax due.

This marks a significant shift in enforcement strategy. Historically, crypto tax compliance relied heavily on voluntary disclosure. Now, with transactional information coming directly from crypto platforms, HMRC is better equipped to identify underreporting or non-compliance.

Reporting Crypto on Your Tax Return

While the reporting framework is new, the tax treatment of crypto-assets is not. Profits or gains from the sale, swap, or transfer of crypto-assets have long been subject to Capital Gains Tax. Additionally, Income Tax and National Insurance may apply where crypto-assets are received as:

• Employment income
• Mining rewards
• Staking or lending proceeds

To accommodate this, the 2024/25 self-assessment tax return includes new disclosure sections specifically for crypto-asset income and gains. All UK taxpayers involved with crypto should ensure that these sections are completed accurately.

There is an HMRC cryptoasset disclosure service for voluntary disclosures where an individual may not have been previously compliant, however we recommend any crypto investors affected by CARF seek professional advice before taken the decision to use the CDS.

Economic Impact

The Government expects the CARF-aligned rules to yield an additional £315 million in tax revenue by April 2030. HMRC has already identified 50 UK-based crypto-asset service providers and estimates their annual compliance costs under the new rules at around £800,000.

The implementation cost to HMRC itself is forecasted at £69 million, largely covering IT infrastructure and support.

A tax information and impact note published with the regulations states that the rules are designed to deter individuals from failing to declare crypto-asset holdings and to encourage accurate and timely reporting.

Key Takeaways for Crypto Holders

• From 1 January 2026, crypto service providers and crypto exchanges will begin collecting data on users’ activities and reporting transaction details to HMRC for UK residents.
• Users will be required to provide service providers with the information requested.
• HMRC will use this data to enforce tax compliance and verify the accuracy of tax returns. Failure to disclose information, or service providers who submit inaccurate or incomplete records will be subject to fines of up to £300 per user.
• The 2024/25 self-assessment tax return  requires full disclosure of crypto gains or income, under the capital gain pages.

UK taxpayers involved with crypto-assets should begin reviewing their records now to ensure full compliance. With greater transparency and increased enforcement on the horizon, proactive reporting is no longer optional, it is essential.

Next Steps

If you have any questions and/or would like advice on the above topic, please contact us at: hello@dixcartuk.com or your usual Dixcart contact.

HMRC has announced that the introduction of mandatory payrolling for most Benefits in Kind (BiKs) will be delayed by one year, until 6 April 2027. This extra time will allow employers and payroll providers to make the necessary preparations for this significant change in how benefits are taxed and reported.

Implementation Timeline

To support the transition, HMRC has outlined a phased timeline, so you can make preparations accordingly:

Action	Timescale
HMRC will consider all feedback received from impacted stakeholders to support HMRC’s drafting of legislation, guidance and technical specifications	April – Autumn 2025
Draft legislation to be published alongside draft guidance for consultation	Autumn 2025
Initial software technical information to be made available to software developers for feedback	December 2025
Responses to the consultation of draft legislation and guidance to be considered	February – April 2026
Updated legislation and guidance to be published	July 2026
Primary and secondary legislation to be laid before Parliament	In line with 2026 Finance Bill timings
Real time information technical specifications to be published	Second half of 2026
Voluntary registering for the payrolling of loans and accommodation in April 2027 to 2028 to go live	November 2026
Voluntary registering for the payrolling of loans and accommodation in April 2027 to 2028 to close	April 2027
Mandating payrolling of BiKs planned to go live	April 2027

Reporting Requirements

Under the new system, BiKs and expenses will be reported through the Full Payment Submission (FPS) process in real time. This shift removes the need for most P11D and P11D(b) forms. To accommodate the change, HMRC expects to introduce over 100 new data fields in FPS submissions, ensuring comprehensive reporting. The Basic PAYE Tools will be updated accordingly ahead of April 2027.

Calculation Process

The calculation process for payrolling BiKs will largely mirror existing voluntary methods. Employers must divide the annual cash equivalent of a benefit by the number of pay periods. If the value is not known at the start of the tax year, a reasonable estimate must be used.

When the value of a benefit changes during the year, the remaining amount should be recalculated and spread over future pay periods. If a BiK is identified late, it can still be added during the tax year without amending previous payments.

For certain benefits, such as fuel cards or accommodation where final values are unavailable within the year, a separate reporting process will apply, with details due by 6 July and Class 1A NICs payable by 22 July after year-end.

Penalties and Compliance

During the first year of mandatory payrolling, HMRC will not apply penalties for reporting errors unless there is evidence of deliberate non-compliance. However, late filing and late payment penalties, as well as interest, will still apply.

Existing penalties for P11D and P11D(b) returns will remain in place where they are still required—particularly for benefits not included in payrolling. Further details on penalties from 2028/29 onwards will be provided in due course.

Registration Requirements

Employers will not need to register to payroll most BiKs from April 2027. HMRC will automatically remove related adjustments from employee tax codes ahead of the change. However, employers wishing to payroll loans and accommodation will still need to register, with the service expected to go live in November 2026. Those who wish to voluntarily payroll benefits before April 2027, must continue to register as currently required.

Considerations

Several specific situations have been addressed by HMRC. For example, employees may face first-year cash flow issues if they are taxed on both historic and current-year benefits. In these cases, HMRC may allow underpayments to be spread over multiple years to ease financial pressure.

In cases where taxing BiKs would exceed 50% of an employee’s pay, employers can either opt out of payrolling that employee and revert to P11D reporting or carry forward the excess tax within the same year. Any remaining tax not collected in-year will be handled via HMRC’s year-end reconciliation or through self-assessment.

Where employees or directors receive no income, employers must still report BiKs through FPS and pay any applicable Class 1A NICs. The FPS will reflect zero income and earnings, and uncollected tax will be reconciled after the tax year.

For employees on non-monthly pay cycles (e.g., weekly, fortnightly, four-weekly), the cash equivalent of benefits must be appropriately spread across the number of pay periods. Employers should be mindful of years with 53 pay periods, adjusting calculations accordingly.

Employee Involvement

There is no requirement to show BiKs on payslips and there are currently no plans to introduce this. Employees can access their benefit details through their personal tax account or via the HMRC app, which employers should encourage them to use.

Employers will still be responsible for issuing a statement to employees by 1 June following the end of each tax year, confirming which benefits were provided and their values.

Next Steps

If you have any questions and/or would like advice on the above topic, please contact us at: hello@dixcartuk.com or your usual Dixcart contact.

The transition to mandatory payrolling is a major operational shift. Employers are encouraged to begin preparing systems and processes now. Further updates from HMRC are expected in the coming months.

 

We are frequently asked by our clients about the often-difficult topic of exit and succession planning. 

This gives rise to several practical issues, especially where a trade sale is not likely, or the existing management team are perhaps not in a position to be able to raise sufficient funds to affect a traditional “Management Buy Out”.

One Solution that is often overlooked is an Employee Ownership Trust (EOT).

An EOT can be used to acquire between 51% and 100% of a trading company’s shares which are then held on trust for the benefit of all the company’s employees, on the same terms.

Unlike traditional employee share schemes, which give rise to direct employee ownership, the EOT allows for indirect employee ownership overseen by selected employee Trustees.

EOT’s have been shown to promote better business performance, greater commitment, and productivity from employees with increased staff loyalty, lower staff turnover and absenteeism. They also allow staff members to benefit from being involved in the management and future direction of the business.

Benefits to the Shareholder

• The sale by the existing business owner of over 51% of his/her shares in the company to a qualifying EOT, would be Capital Gains Tax (CGT) and Inheritance Tax (IHT) free.  This can prove to be a valuable relief given that the Business Asset Disposal relief limit for the reduced 10% rate of CGT is only £1 million;
• A market is created for the shares that might not otherwise exist;
• Unlike in a liquidation situation (which is often the only choice for small business owners to realise the value of the business), the company can continue to operate, and the shareholders and employees can still be part of that business;
• Typically, the sale of shares in a company to an EOT is funded by a mixture of existing cash, from within the company, and external loan instruments;
• It avoids the need for often complex and expensive negotiations when selling to a third party.

Benefits to the Company and Employees

• A trading company owned by an EOT is able to pay cash bonuses of up to £3,600 per annum to all employees (on a ‘same terms’ basis);
• These bonuses will be tax-free but will be subject to National Insurance Contributions (NIC’s);
• The company gets corporation tax relief on these tax-free bonuses;
• There are benefits in terms of increased staff motivation and job retention, as set out above.

Summary and Additional Information

An EOT can provide a tax-beneficial way for shareholders to realise value and to involve employees in the company that they work for, although the structuring and funding of an EOT requires careful consideration.

If you would like to find out more about how an EOT may benefit you and your business, please contact us: hello@dixcartuk.com.

FICs are companies limited by shares (an “Ltd” or “Limited”) and often established by parents and/or grandparents (“Founders”) to benefit themselves and their family, as shareholders. The popularity of FICs has increased over recent years, and they are viewed as a corporate alternative to the more common discretionary trust.

An FIC owns assets such as property, which generate income and capital gains, which can be distributed to the family shareholders over time.

Assets generally come from the Founders themselves, either through a loan or a direct transfer into the FIC. Each shareholder owns a different class of shares (often referred to as “alphabet shares”), gifted to them by the Founders.

Generally, the Founders’ shares will have the usual rights to vote and receive dividends but not capital, whereas the gifted shares will only have the rights to receive dividends and capital, but not to vote.

This ensures that the Founders have the sole right to make decisions regarding the FIC, at both shareholder and board level, including decisions relating to dividend payments.

What are the Benefits of Establishing an FIC?

FICs allow individuals to transfer assets from their personal estates into a corporate structure, where they—acting as the sole voting shareholders (Founders)—retain control over those assets, including decisions about the board’s composition. This setup enables them to generate a controlled and ongoing source of income for themselves and their family over time.

If the Founders lend money to the FIC, the loan can be gradually repaid using the FIC’s post-tax profits, alongside any dividends distributed from its earnings. This arrangement can offer the Founders a continuous stream of income.

Alternatively, if the loan’s capital is no longer required, the Founders may choose to gift its value to other family members. This would remove the loan’s value from their taxable estate for Inheritance Tax purposes, provided they survive for seven years following the date of the gift.

There are a number of potential tax advantages when using FICs, including Inheritance Tax, but these will vary depending on the size of the investments/loans, the assets held by the FIC, and the personal circumstances of the Founders. It is therefore very important to speak with a tax specialist from the outset, who can provide guidance on the tax merits of an FIC, tailored to the specific circumstances and objectives of each prospective Founder. .

Limited companies also offer the great advantage of flexibility. This is ideal for FICs where family structures, objectives and other considerations, are changing regularly. Examples of such flexibility, include shares being transferred, new shares being issued with different rights, and changes to the composition of the board of directors.  All of which can be decided by the Founders.

How are FICs Set Up and Managed?

FICs need bespoke articles of association and a shareholders’ agreement, before any assets are put into the FIC and before any “alphabet shares” are transferred to family members.

These documents will detail how the FIC will be run, how dividends will be declared, when meetings are to be held, the rights of the shareholders, including voting rights, and rights on the issue, and transfer of shares.

The operation of the FIC extending from its day to day activities to amending its constitution, will remain at the absolute discretion and control of the Founders.

Additional Information

To find out how an FIC might be of benefit to you, and for assistance in establishing an FIC appropriate to meet your needs, please contact Paul Webb at: hello@dixcartuk.com.

From 6 April 2025, the UK will move to a new residence-based system for Inheritance Tax (IHT), marking one of the most significant shifts in the taxation of wealth in recent decades. These changes will affect not only long-term UK residents, but also internationally mobile individuals who may have previously relied on their non-domiciled status for IHT planning.

What Is Changing?

At present, UK IHT is based on domicile. UK domiciliaries are taxed on their worldwide assets, while non-doms are only subject to IHT on their UK situs assets, unless they become “deemed domiciled” after 15 years of UK tax residence.

From 6 April 2025, the domicile test will be replaced. Under the new rules:

• Individuals who have been UK tax resident for at least 10 out of the previous 20 tax years will become long-term residents and fall within the scope of UK IHT on their worldwide estate.
• Long term resident individuals who leave the UK will continue to be exposed to UK IHT on their worldwide assets for a period ranging from 3 to 10 years, depending on how long they were UK resident before departure.

What About Trusts?

The treatment of Trusts will also change. From 6 April 2025, settlor interested trusts will no longer provide protection from UK taxation on income or gains arising within them when the settlor no longer qualifies for the FIG regime. While there will remain an element of IHT protection, these Trusts will be brought within the UK’s relevant property regime.

This means:

• Trusts will be subject to IHT charges of up to 6% every 10 years on the value of the assets within the Trust
• An additional exit charge may apply when capital is distributed.
• Once in the relevant property regime, a further pro rata exit charge will apply if and when the settlor ceases to be a long-term UK resident.

It could take seven full 10-year cycles of IHT charges at 6% for the tax payable by a Trust to exceed the IHT payable if the same assets were held personally and taxed at 40% on death. Nonetheless, the administrative burden and cashflow impact of these periodic and exit charges should not be underestimated.

Broader Changes on the Horizon

Alongside the shift to residence-based taxation, further IHT reforms are expected in the coming years:

• From 6 April 2026, the Government plans to introduce a cap on Business Relief and Agricultural Relief, limiting 100% relief to the first £1 million of qualifying assets.

From 6 April 2027, unused pension funds will also become subject to IHT on death,

What Does This Mean in Practice?

Now that the new rules are in force, many long-standing estate plans and asset-holding structures must be reassessed under the new regime.

This includes:

• Reviewing the relevance and efficiency of existing offshore Trusts.
• Reassessing asset ownership between family members and across jurisdictions.
• Ensuring clear documentation for residency status and historic Trust arrangements.

The new residence-based approach brings complexity, particularly for internationally mobile individuals and non-doms who previously relied on the excluded property regime. While the window for new planning has now closed, it remains important to ensure that existing structures are compliant and do not trigger unnecessary tax exposure under the new rules.

Final Thoughts

The move to a residence-based IHT regime represents a fundamental change in how the UK taxes wealth at death. For those with international lives or assets, this is a key moment to take stock. For more information on this or to speak to one of our experts, please use our enquiry form or email us at hello@dixcartuk.com.

At Dixcart, we work closely with individuals and families to provide clear, tailored advice in light of changing legislation.