There are special rules concerning the liability to IHT of a transfer made during one’s lifetime. For example, most gifts made during a person's life are not subject to tax at the time of the gift. These lifetime transfers are known as 'potentially exempt transfers' or 'PETs'.

These gifts or transfers achieve their potential of becoming exempt from IHT if the taxpayer survives for more than seven years after making the gift. If the taxpayer dies within three years of making the gift, then the IHT position is as if the gift was made on death. A tapered relief is available if death occurs between three and seven years after the gift is made.

The effective rates of tax on the excess over the nil rate band for PETs is:

• 0 to 3 years before death 40%
• 3 to 4 years before death 32%
• 4 to 5 years before death 24%
• 5 to 6 years before death 16%
• 6 to 7 years before death 8%

IHT may be chargeable if the person making the gift retains some 'enjoyment' of the gift made. For example, where an elderly person gifts their home to their children (who usually live elsewhere) and continues to live in the house rent-free. In this case the taxman will not accept that a true gift has been made and the 'gift' would remain subject to inheritance tax even if the taxpayer dies more than 7 years after the transfer.

If you are currently considering making a significant gift to your loved ones, it may be prudent to contemplate doing so sooner rather than later as there is always the possibility of changes to the tax regime especially with a new government in place.

Capital Gains Tax (CGT) is normally charged at a simple flat rate of 20% and this applies to most chargeable gains made by individuals. If taxpayers only pay basic rate tax and make a small capital gain, they may only be subject to a reduced rate of 10%. Once the total of taxable income and gains exceed the higher rate threshold, the excess will be subject to 20% CGT.

A higher rate of CGT applies to gains on the disposal of residential property (apart from a principal private residence). The rates are 18% for basic rate taxpayers (2023-24: 18%) and 24% (2023-24: 28%) for higher rate or additional rate taxpayers. Again, if the gain pushes a taxpayer into the higher rate, then CGT will be payable at both rates.

The 18% basic rate and 28% higher or additional rate of CGT that applies to gains in respect of carried interest (the share of profits or gains that is paid to asset managers) remain unchanged in the current tax year.

The usual due date for paying any CGT owed to HMRC is the 31 January following the end of the tax year in which the capital gain was made. However, since 27 October 2021 any CGT due on the sale of a residential property needs to be paid within 60 days. In practice, this change only applies to the sale of any residential property that does not qualify for Private Residence Relief (PRR).

There is also an annual CGT exemption for individuals that is currently £3,000 (2023-24: £6,000). A husband and wife each have a separate exemption. Same-sex couples who acquire a legal status as civil partners are treated in the same way as married couples for CGT purposes.

In the coming months we will start to see how our new government intends to change the UK tax rules to further its economic growth agenda.

Whatever they decide to do, readers who presently benefit from tax and/or business planning strategies, should be prepared to revise their plans as fiscal changes are announced.

For example, if you are considering the disposal of assets at a profit, then any gain may be subject to Capital Gains Tax (CGT). If the Chancellor changes the CGT rates, perhaps by treating capital gains as income for tax purposes – or by removing or reducing present CGT reliefs – your after tax profits may not be at a level to satisfy your plans.

The first opportunity to alter tax or other business related matters will likely be the Autumn Budget. This year will be Rachel Reeves first announcements at the despatch box, and she may introduce far reaching changes.

This does mean that there is a short period before the Autumn Budget when we will be subject to present legislation. If you are considering radical changes to your business or financial circumstances in the next year would it be sensible to consider moving transactions forwards as a hedge against negative changes come September/October 2024?

We recommend keeping a weather eye on your planning options. If you are about to buy or sell business or personal assets, please call so we can consider your options. Double guessing what the Treasury may or may not do is not an exact science, but we can be fairly confident that changes are on the way, the fiscal goal posts will be moving.

Ever wondered how your stake in your business is represented in your accounts?

The answer can be found at the bottom of your balance sheet. Simply put it is the value of your physical business assets less any liabilities; usually described as net assets.

But this is not the full story as there is a further intangible asset that is generally omitted from your accounts. It’s called goodwill. It is the extra value a buyer is willing to pay, over and above the net assets value of your business, for the rights to your customer lists and other non-physical assets that are generally left out of your accounts.

Ultimately, what you can sell a business for will be limited to what a buyer is willing to pay. But there is value in making a consistent estimate of what your business may be worth, especially if this exercise is undertaken annually, when your financial accounts are prepared.

In this way you will be able to see if the valuation is increasing or decreasing, and if increasing, is the increase at a sufficient rate to meet your planned future exit from your business?

Hopefully, many of you will already be monitoring your business value in this way, if not, please get in touch so we can figure out the best way to add this important indicator to your final accounts each year.

Two separate £1,000 tax allowances for property and trading income were introduced in April 2017. If you have both types of income highlighted below, then you can claim a £1,000 allowance for each.

The £1,000 exemptions from tax apply to:

• If you make up to £1,000 from self-employment, casual services (such as babysitting or gardening) or hiring personal equipment (such as power tools). This is known as the trading allowance.
• If your annual gross property income is £1,000 or less, from one or more property businesses you will not have to tell HMRC or declare this income on a tax return. For example, from renting a driveway. This is known as the property allowance.

Where each respective allowance covers all the individual’s relevant income (before expenses) the income is tax-free and does not have to be declared. Taxpayers with higher amounts of income will have the choice, when calculating their taxable profits, of deducting the allowance from their receipts, instead of deducting the actual allowable expenses.

You cannot use the allowances in a tax year, if you have any trade or property income from:

• a company you, or someone connected to you, owns or controls;
• a partnership where you, or someone connected to you, are partners; or from
• your employer or the employer of your spouse or civil partner.

You cannot use the property allowance if you:

• claim the tax reducer for finance costs, such as mortgage interest for a residential property; or
• deduct expenses from income from letting a room in your own home, instead of using the Rent a Room scheme.