Tax Insider Newsletter Bundle

Inheritance Tax: The Easy Win Most People Miss

The acronym ‘KISS’ (‘keep it simple, stupid’) refers to a design principle originating from the US Navy in 1960. However, it can sometimes be an apt principle in an inheritance tax (IHT) context!

Some taxpayers engage in sophisticated planning arrangements to reduce the possible IHT liability of 40% on their death estate. However, with a little forward planning, a relatively simple strategy can achieve significant results.
Mark McLaughlin highlights a relatively easy strategy to save inheritance tax over time. 

Husbands and wives or those in civil partnerships (included in the term ‘spouses’ in the rest of this article) will often seek to minimise the family’s tax liability by the efficient use of personal allowances and tax bands. 

One strategy for business owners who operate through a limited company might be paying dividends to their spouse. While this may seem straightforward, potential tax traps can lead to unexpected liabilities and scrutiny from HM Revenue and Customs (HMRC).
 
Richard Curtis considers potential problems when dividends are paid to spouses and civil partners.

VAT and Private Use: Are You Accounting for It Correctly?

VAT is generally not reclaimable on goods or services intended for personal use. If a business purchases items or services and uses them privately, it is considered a taxable self-supply, requiring the business to account for VAT on that private usage. 

Private use of business assets, such as phones or vehicles, normally requires accounting for output VAT unless the input tax is apportioned to take account of any private use. 

Andrew Needham looks at VAT recovery on goods and services that have some personal use and when output VAT is due on that private use.

April 2027: A Tax Rise for Landlords and Savers

At the November 2025 Budget, the Chancellor announced an increase in the tax rates applicable to income from property businesses and savings, which will apply from 6 April 2027. 

Kevin Read looks at the income tax rises coming in April 2027.

Dying Without a Will: The IHT Cost

Some find it morbid to think about planning for their own death, so put off writing a will.

Tristan Noyes  looks at the impact of dying without a valid will and how that affects an individual’s inheritance tax position. 

Overdrawn Director's Loans: Watch for the Section 455 Charge

At the end of the accounting period, it is not unusual to find that a director and shareholder of a closely-controlled company has overdrawn their directors’ loan account, resulting in a debit balance owed back to the company, with the ‘loan’ remaining unpaid.  

Jennifer Adams outlines the tax implications of an overdrawn director’s loan account at the end of an accounting period, and anti-avoidance rules designed to prevent misuse.

Discretionary Trusts: A Route to Tax-Free Gifting

A trust is essentially an arrangement whereby the legal ownership is in the hands of one person, with beneficial ownership in the hands of another; the legal owner (the trustee) holds that asset as custodian for the beneficial owner (beneficiary). 

Chris Thorpe outlines how discretionary trusts can be used to gift assets tax-free.

Q&As with Arthur Weller

Dividends or bonuses? We can work it out!

Consider the following scenario:

'On a wintry sunny morning, Alan was reviewing his company’s January 2024 management accounts. Alan was the sole director and 100% shareholder of Llandudno Hotels Ltd, which operated two large hotels in Llandudno. The business was on course to healthy pre-tax profit of around £650,000 for the year ended 31 March 2024. Alan had been planning to pay himself a substantial ‘bonus’ before the year-end'. 

What does Alan do?

Peter Rayney examines an owner-manager’s cash extraction following the numerous tax and National Insurance contributions changes.

Use them or lose them: 2023/24 tax allowances

As the tax year draws to a close, it is prudent to review one’s 2023/24 tax allowances and consider whether there is scope for utilising any unused allowances so they are not lost. 

Sarah Bradford explores options for using 2023/24 tax allowances so they are not wasted.

Record-keeping in a digital age

Lee Sharpe looks at taxpayers’ record-keeping obligations in light of HMRC’s inexorable march to digital everything (almost).

Historically, HMRC has been quite relaxed about whether original records must be maintained or digital facsimiles (scans, etc.). 

Trap for business owners seeking CGT incorporation relief

HM Revenue and Customs (HMRC) recently commenced a ‘One to Many’ campaign, targeting taxpayers who incorporated property businesses in the tax year 2017/18 but reported no capital gains tax (CGT) liability in their tax returns on the basis that ‘incorporation relief’ applied in full. 

Mark McLaughlin highlights a potential trap for business owners seeking capital gains tax incorporation relief.

Q&As with Arthur Weller