Author: Glenn

For high net worth individuals (HNWIs), tax planning is not simply a compliance activity, it is a strategic tool to preserve and grow wealth. With rising scrutiny from HMRC, frozen allowances, and increasingly complex legislation, the value of well-structured planning has never been higher.

HNWIs typically have multiple sources of income: from employment, dividends, property, pensions, or overseas investments. This complexity brings opportunities, but also risk. Without active tax planning, much of that income can be lost to inefficient structuring or missed reliefs.

Using allowances such as the personal allowance, dividend allowance, and savings allowance is key. Where income exceeds £100,000, tapering of allowances becomes relevant. Income splitting between spouses and the use of family investment companies or trusts can help manage liabilities.

The capital gains tax (CGT) annual exemption is now only £3,000 (2025–26). Disposals must be timed carefully, with use of spousal exemptions or crystallising gains across tax years considered.

HNWIs are most exposed to inheritance tax (IHT), which charges 40% on estates above £325,000 (plus any residence nil-rate band). Making lifetime gifts, using trusts, and taking advantage of the exemption for gifts from surplus income can significantly reduce exposure.

Global families must manage UK tax residency and domicile status carefully. The remittance basis may apply to foreign income, but this often requires payment of the remittance basis charge. Changes to domicile treatment post-April 2025 make planning in this area even more important.

Pensions, ISAs, and offshore bonds can provide valuable tax sheltering. For HNWIs, using the annual and lifetime pension allowances efficiently, especially while they remain available, is a core planning task.

In summary, proactive tax planning is about more than saving money. It gives HNWIs confidence, control, and the ability to plan for the future. With HMRC increasing its focus on high earners, reviewing tax affairs annually is no longer optional, it makes good financial sense.

1 July 2025 – Due date for corporation tax due for the year ended 30 September 2024.

6 July 2025 – Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.

19 July 2025 – Pay Class 1A NICs (by the 22 July 2025 if paid electronically).

19 July 2025 – PAYE and NIC deductions due for month ended 5 July 2025. (If you pay your tax electronically the due date is 22 July 2025).

19 July 2025 – Filing deadline for the CIS300 monthly return for the month ended 5 July 2025. 

19 July 2025 – CIS tax deducted for the month ended 5 July 2025 is payable by today.

1 August 2025 – Due date for corporation tax due for the year ended 31 October 2024.

19 August 2025 – PAYE and NIC deductions due for month ended 5 August 2025. (If you pay your tax electronically the due date is 22 August 2025)

19 August 2025 – Filing deadline for the CIS300 monthly return for the month ended 5 August 2025. 

19 August 2025 – CIS tax deducted for the month ended 5 August 2025 is payable by today.

Make regular gifts from your income and avoid inheritance tax. If structured properly, surplus income gifts can support loved ones and stay outside your estate without the seven-year survival rule.

Wealthier individuals can benefit from a lesser-known but highly effective IHT exemption for gifts made out of surplus income. This is particularly useful for structured, recurring gifts such as grandparents helping with school fees or contributing to a child's living expenses.

These gifts may be fully exempt from inheritance tax if they meet three key conditions:

1. They form part of the transferor’s normal expenditure,
2. They are made out of the transferor’s income, and
3. The transferor retains enough income to maintain their usual standard of living.

If these criteria are met, the gifts are immediately exempt, they do not require the donor to survive seven years, as is the case with potentially exempt transfers (PETs).

It’s important to note that part of a gift may qualify under this exemption, while the remaining portion may be chargeable or exempt under another rule. However, these rules do not apply to certain types of transfers, including:

• Transfers on death or on the ending of a qualifying interest in possession in a trust,
• Certain deemed PETs under Finance Act 1986,
• Transfers made by close companies,
• Premiums on life insurance policies linked to annuities,
• Transfers of capital assets unless those assets were bought with income specifically for gifting.

The exemption does not override the gift with reservation rules, meaning if the donor retains a benefit from the gifted asset (e.g., continues to live in a gifted property rent-free), the gift may still be treated as part of their estate for IHT purposes.

To take advantage of the income-based exemption, careful consideration has to be given to ensure that these payments form part of the transferor’s normal expenditure and is made out of income and not out of capital. The transferor must also ensure that they are left with enough income for them to maintain their normal standard of living after giving any gifts. HMRC may request evidence such as bank statements, income records, and written intentions to support a claim for this exemption. 

Expecting lower profits 2024-25 compared to 2023-24? You can ask HMRC to reduce your 31 July 25 tax payment on account. Act early to manage cash flow. Use your online account or we can handle it for you.

Self-assessment taxpayers normally pay their income tax in three instalments each year. The first two payments on account are due on 31 January during the tax year and 31 July after the tax year ends. These are each based on 50% of the previous year’s net income tax liability.

This means that the 31 January 2025 (now passed) and upcoming 31 July 2025 payments are both based on your 2023–24 tax liability.

A final balancing payment is due on 31 January 2026, once your actual tax bill for 2024–25 has been confirmed through your submitted tax return.

If you expect your income or profits for 2024–25 to be lower than for 2023–24, you can ask HMRC to reduce your 31 July 2025 payment on account. This can be done through your HMRC online account or by submitting form SA303 by post. You must provide a reasonable estimate of your expected tax liability.

If we are your registered tax agent we can undertake this election for you.

There is no limit to how many times you can apply to adjust your payments. However, if you reduce your payments too far and underpay, HMRC may charge interest or penalties on the shortfall.

You are not required to make payments on account if:

• Your net Income Tax liability for 2023–24 was less than £1,000, or
• At least 80% of your 2023–24 tax liability was collected at source (e.g. through PAYE).

If your taxable profits are likely to increase in 2024–25, there’s no need to notify HMRC in advance, but you should be prepared for a higher balancing payment in January 2026.

Buying a zero-emission electric car through your limited company could mean 100% tax relief in year one. Understand the capital allowances and boost your business’s tax efficiency with smart vehicle choices.

If you are considering purchasing a company car through a limited company, it’s important to understand the tax implications, especially the significant tax write-offs available for electric vehicles with zero emissions.

The tax treatment will depend on how the car is financed, but in most cases, the vehicle will be classified as a fixed asset, with tax relief available through capital allowances. Unlike other business assets, company cars do not qualify for the Annual Investment Allowance (AIA). Instead, they fall into specific capital allowance categories based on their CO₂ emissions and when they were purchased.

If you purchase a new and unused fully electric or zero-emission car, it qualifies for a 100% First Year Allowance (FYA). This means:

• You can deduct the full cost of the car from your company’s taxable profits in the year of purchase.
• The car must be brand new and registered as zero-emission to qualify.

If the car does not meet the criteria for 100% FYA, it will fall into one of the following categories:

• 18% Main Rate Allowance: Applies to cars with lower CO₂ emissions (but not zero). 18% of the car’s cost can be written off each year on a reducing balance basis.
• 6% Special Rate Allowance: Applies to cars with higher CO₂ emissions or certain second-hand vehicles. Only 6% of the cost is deductible each year.