The UK announced, on 29 May, that it had become the first G7 country to strike a trade deal with the Gulf Cooperation Council (GCC) after almost four years of negotiations. The Free Trade Agreement (FTA) opens unprecedented opportunities for businesses across the Gulf region, supporting economic diversification and the vision strategies driving the nations forward.

The GCC brings together six strategically important and high growth economies – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) – with a combined GDP of around £1.9 trillion and a population of over 62 million people.

The UK’s trade relationship with the GCC is already well established. Total bilateral trade stands at £53 billion annually, which is equivalent to the UK’s eighth largest export market for goods. The FTA provides a formal framework for that relationship for the first time and is expected to increase bilateral trade by £15.5 billion annually in the long term.

The FTA is designed to drive growth across key sectors including aerospace, agri-food, energy, technology and financial services, while promoting innovation through provisions covering artificial intelligence, paperless trade and clean energy.

It also supports small- and medium-sized enterprises (SMEs) through trade facilitation measures and digital tools. Strategically, the FTA strengthens the UK-GCC partnership, aligns with GCC economic transformation agendas, such as Vision 2030, and enhances investment flows.

Under the FTA, the GCC will progressively liberalise up to 90% of its tariff lines within 10 years of entry into force. The UK has agreed to eliminate tariffs on all current imports from the GCC as soon as the FTA is implemented, benefiting businesses exporting GCC goods to the UK. To benefit from preferential tariff rates, goods must comply with the FTA’s rules of origin.

Under streamlined customs procedures, businesses that meet certain defined criteria may benefit from reduced data requirements, lowering administrative burdens and costs. All goods are expected to be cleared for customs purposes within 48 hours, provided all requirements are met and no physical inspections are required. Perishable goods benefit from an accelerated clearance target of six hours.

The FTA supports the adoption of digital customs processes, which will simplify documentation, reduce processing times, and minimise costs for traders. Relevant customs information will be required to be published online and provided in English or an easily translatable format, making it easier for businesses to access and understand applicable rules.

Businesses will have the right to request an advance ruling on tariff classification, valuation and rules of origin. These rulings must be issued within 90 days, giving companies advance clarity on how their goods will be treated at customs enabling more informed business planning.

The FTA includes comprehensive provisions on financial services, professional services, digital trade, and e-commerce. The mutual recognition frameworks for professional qualifications are expected to facilitate cross-border mobility of professionals alongside the dedicated digital trade chapter ensuring the free flow of data, reducing barriers for technology-driven businesses.

The FTA also provides market access to public procurements in certain GCC jurisdictions, including Bahrain and the UAE, offering UK businesses an opportunity to compete for government contracts.

The next steps involve finalising and legally validating the FTA text, followed by the formal signing by the UK and all GCC member states. The FTA will enter into force once it has been ratified by all parties.

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There is a significant change in how the UK tax self-assessment system operates, from April 2026. This is due to the introduction of Making Tax Digital for Income Tax (MTD IT).

There has been some uncertainty regarding how this regime change will affect non-UK residents with UK rental income and/or UK self-employment income.

Details recently published by HMRC confirm that non-UK residents who would otherwise be required to join MTD IT in April 2026 may be entitled to a one-year deferral. This is good news.

MTD IT in Brief

MTD IT will affect individuals with gross rental income and/or self-employment income (‘qualifying income’) over a relevant MTD IT threshold, measured at different mandation dates.

Those with annual qualifying income of more than £50,000 are required to comply with MTD IT from April 2026 (the first mandation date).

From April 2027, MTD IT expands to those with annual qualifying income over £30,000.

From April 2028, MTD IT expands again to those with annual qualifying income over £20,000.

These thresholds are assessed against the gross qualifying income reported on the individual’s most recent annual UK self-assessment tax return filed prior to the relevant mandation date (assuming all returns are filed on time).

Therefore, 2024/2025 UK self-assessment tax returns were due to be submitted to HMRC by 31 January 2026. If an individual’s 2024/2025 UK self-assessment tax return reported gross qualifying income of more than £50,000, they are within the scope of MTD IT from April 2026.

When MTD IT applies, there is a requirement to:

• keep digital record records of qualifying income
• submit quarterly updates to HMRC, using MTD compatible software, and
• undertake year-end tax reporting.

Currently for such individuals, only the year-end tax reporting is required, via annual UK self-assessment tax return.

How does MTD IT apply to non-UK residents?

For non-UK residents, this regime can apply if the individual rents out UK property and/or carries out self-employment in the UK, and such gross UK source income exceeds the above MTD IT thresholds. For the avoidance of doubt, this includes those non-UK residents who are registered as non-resident landlords with HMRC.

Many non-UK residents renting out UK property, own this property jointly. For jointly owned property, only the individual’s relevant ownership share is counted, e.g. if non-UK resident spouses own a UK rental property jointly, each spouse’s qualifying income would be 50% share of their gross rent, if this 50% share exceeds the MTD IT threshold then the regime applies.

MTD deferral for non-UK residents

After some delay, it’s now been confirmed that any individual who:

• filed non-residence pages (SA109) with their 2024/2025 UK self-assessment tax return, and
• expects to file non-residence pages (SA109) with their 2026/2027 UK self-assessment tax return

benefits from a one-year deferral from MTD IT, if they would otherwise need to register for MTD by April 2026.

This deferral will apply automatically i.e. there is no requirement for the individual, or their agent, to apply to HMRC for exemption from MTD IT.

There are other reasons for automatic exemption, for example those without a UK National Insurance Number.

Automatic non-UK resident deferral example

For example, Victor is a Gibraltar resident and owns a London flat that he rents out for £60,000 per year. Victor declares this rental income on his UK self-assessment tax return, because it is UK source, and submits SA109 pages to declare his non-UK resident status (as an aside, this UK rental income is not reportable on Victor’s Gibraltar IT1 tax return).

Ordinarily, Victor would come within MTD IT from April 2026, because his qualifying income is over the relevant threshold i.e. over £50,000.

However, because Victor filed SA109 pages as part of his 2024/2025 UK self-assessment tax return and expects to do so in 2026/2027 (he expects to remain Gibraltar resident and non-UK resident under the UK’s Statutory Residence Test), he will be automatically deferred from MTD for one year and will not need to join until April 2027 at the earliest.

If Victor’s rental income remains at the same level, currently he will have to register for MTD from April 2027 because his qualifying income for 2025/2026 is more than £30,000.

Deferral on application

Where the requirements for automatic non-UK resident deferral are not met (e.g. no non-resident pages (SA109) were filed for 2024/2025), it may be possible to apply to HMRC for the one-year deferral if there is a reasonable expectation of being non-UK resident in the 2026/2027 UK tax year. There is also a similar application process for those who are digitally excluded.

In summary, non-UK residents in receipt of UK rental and/or UK self-employment income, need to consider this significant change to the UK tax reporting regime.

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The UK Autumn Budget, presented on 26 November 2025, introduced a number of measures that will have an impact on UK and international private clients with interests offshore. It followed the wholesale dismantling of the longstanding non-domiciled and the ‘protected trust’ tax regimes from the UK tax system last April.

As of 6 April 2025, the UK government replaced ‘domicile’ as a connecting factor for liability to applicable UK taxes, including inheritance tax (IHT), and adopting a residence-based regime instead. Individuals who have been UK resident for at least 10 out of the past 20 tax years are classified as a ‘Long-Term Resident’ (LTR) and exposed to IHT on their worldwide assets.

To ensure that LTRs do not escape tax obligations immediately upon leaving the UK, the legislation includes a ‘tail’ provision. This means that, if the LTR dies within the residence tail period, their worldwide estate will still be subject to UK IHT for up to 10 years after they cease to be a UK resident.

The length of the tail will depend on the duration of the individual’s residence in the UK. The minimum length of the tail is three years, which applies to individuals who have been UK resident for 10 to 13 of the past 20 UK tax years. The length of the tail increases by one tax year for each additional year of residence, up to a maximum of 10 years.

Individuals who do not meet the criteria for LTR status generally remain liable for IHT on UK-based assets only. This aligns with the previous system, under which non-UK domiciled individuals were taxed on UK situs assets but non-UK assets were out of scope for IHT purposes.

A new Foreign Income and Gains (FIG) regime was also introduced for people moving to the UK for the first time or after living abroad for at least 10 years. Foreign income and gains are tax-free for the first four years in the UK but are then subject to standard UK tax rules.

Under the old rules, trusts set up by non-doms were free from UK IHT forever. This shelter was removed. Once the settlor is classified as an LTR, the trust falls within the UK’s ‘10-year charging regime’, which imposes a tax charge of up to 6% every 10 years or when assets leave the trust – even if the settlor is excluded as a beneficiary of the trust.

The recent Autumn Budget announced a cap for these charges: for certain trusts created before 30 October 2024, all charges for each 10-year period – including the 10-year charge and any exit charges – will be limited to £5 million. Unfortunately, the £5 million cap applies only per trust, so multiple smaller trusts settled by one settlor will not get relief.

The Budget also introduced, with immediate effect, a measure to prevent the possibility of avoiding the exit charge on non-UK assets held in trust when a settlor ceases to be an LTR by converting non-UK relevant trust property into UK-situs assets immediately prior to the exit.

From 6 April 2026, it will also no longer be possible for an individual who is not an LTR to shelter UK agricultural property from IHT by holding it via a non-UK entity. It will now be subject to the same IHT treatment that was introduced for residential property under the IHT anti-enveloping legislation in 2017. UK commercial property can still be sheltered by non-LTRs using an offshore structure.

As we have previously highlighted, the main beneficiaries of all these changes to the UK’s IHT regime, are long-term UK expatriates. Before 6 April 2025, the worldwide estates of individuals with a UK domicile of origin remained subject to IHT unless they had succeeded in shedding their domicile of origin and acquiring a new domicile of choice in a distinct jurisdiction.

This involved moving to a country and forming a permanent or indefinite intention to remain there, which created difficulties for globally mobile individuals who did not settle in any one location. It was not possible to obtain a domicile ruling from HMRC, so the IHT position of many British ex-pats was uncertain.

With the UK’s new statutory residence test in place, British ex-pats have certainty as to their residence status. If they have at least 10 tax years of non-UK residence, they can set up an overseas excluded property trust (offshore trust) without any risk of an upfront IHT charge. This may be advantageous for asset protection or succession planning, as well as managing assets for future generations.

Furthermore, subject to the tax regime in their country of residence, gains and income accumulated within the trust may not be exposed to personal taxation. Many countries, even EU states such as Italy, Greece, Cyprus and Malta, have non-domicile tax regimes that only impose tax on income and gains that are either sourced locally or are remitted to the country of residence. Income and gains that remained within an offshore trust would not therefore be subject to taxation.

Consideration will only need to be given to the IHT treatment of the trust if the expat returns to live in the UK. Previously, an individual with a UK domicile of origin in the UK who then became UK resident was immediately treated as domiciled in the UK, and taxable on their worldwide income or gains. Now their foreign assets will not be in scope of IHT until such time as they become classified as an LTR, and they can also benefit from the new FIG regime for four years.

British expats living abroad can take advantage of this favourable new regime to return to the UK for a short period, for business reasons, to care for elderly parents or to cease being resident in another jurisdiction for foreign tax planning reasons. And, because they can clearly identify their first year of UK residence, they can take the steps necessary to cease UK residence again, if and when desired.

Please contact Simon Denton sdenton@sovereigngroup.com or David Griffiths dgriffiths@sovereigngroup.com at Sovereign UK for further information or to arrange a non-obligatory call or virtual meeting to examine your circumstances and requirements.

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The UK Companies House and Insolvency Service announced that it had shut down three connected companies providing unregulated company secretary and registration services to more than 11,000 UK businesses for overseas clients, predominantly from China, that had no real presence in the UK.

Yunma Tianlong International Consulting Co. Limited, Busy Secretary Service Limited and J&C Business (UK) Co. Limited were all wound-up at the High Court in London on 29 January. None of the companies were registered with HM Revenue and Customs (HMRC) as trust and company service providers (TCSPs).

They were operating an unregulated business model because they had failed to register as TCSPs, did not conduct anti-money laundering due diligence on clients wishing to register UK companies, and were creating a false impression that their clients had a genuine UK business presence. Investigators found that, as of April 2024, one address in South Croydon had more than 8,500 companies registered to it, but the uncollected post had piled up inside reaching the letterbox.

The three companies also filed dormant accounts at Companies House despite conflicting information that suggesting active trading which could not be verified. They also did not appear to follow UK data protection rules and did not fully co-operate with Insolvency Service investigations.

Registered TCSPs, like Sovereign, are firms that offer services such as forming companies, acting as directors, secretaries or trustees, and providing registered office addresses. They must be registered with HMRC and follow strict anti-money laundering rules.

“Most third-party agents provide legitimate services and play an active role in the creation and management of UK companies,” said Martin Swain, Companies House Director of Intelligence and Law Enforcement Engagement.

“We know however that some agents fail to comply with the rules and are careless, even reckless, in carrying out their duties. We will continue to step up our efforts with our law enforcement partners to crack down on this type of activity and protect the integrity of the register.”

Sovereign Corporate & Trustee Services Limited (SCATS), based in Chester, is supervised as a TCSP by HMRC for Anti-Money Laundering (AML). It specialises in helping UK businesses and individuals comply with Companies House and HMRC regulations, including identity verification, Trust Registration Service data and Register of Overseas Entities (ROE) requirements.

Businesses supervised by HMRC are subject either to fit and proper or approval requirements to ensure that the businesses’ beneficial owners, officers and managers are appropriate people to undertake those roles. Relevant persons must also pass the appropriate test before the business can register, and remain registered, with HMRC.

If you are looking to set up a genuine business presence in the UK, it is essential to use a properly registered and supervised TCSP. More than just a badge of approval, our registered TCSP status formalises our ability to support clients, particularly those overseas, with the evolving demands of UK corporate compliance.

The post UK Companies House shuts down ‘brass-plate factory’ for China-based clients appeared first on The Sovereign Group.

Companies House has issued updated draft guidance to assist businesses to identify who really holds ‘significant influence or control’ in a company for the purposes of the Register of People with Significant Control.

What is a Person with Significant Control?

A Person with Significant Control (PSC), sometimes called a ‘beneficial owner’, is someone who owns or controls a company. All England & Wales Companies are required to identify their PSCs and inform Companies House who they are and which of these conditions they meet. If a company cannot identify its PSC(s), or does not have any, it must also inform Companies House.

A company can have one or more PSCs. A PSC must meet one or more conditions known as the ‘nature of control’, which typically includes an individual or legal entity that:

1. Holds more than 25% shares in a company.
2. Holds more than 25% voting rights in a company.
3. Has the right to appoint or remove a majority of directors.
4. Has the right to exercise “significant influence or control” over the company.
5. Has the right to exercise significant influence or control over the activities of a trust or a firm that meets any of the other specified conditions in relation to the company.

The new draft guidance is intended to clarify the terminology and to provide examples of what might constitute ‘a right to exercise’ significant influence or control – as per conditions 4 and 5 above – or what might not.

Rights that may indicate Significant Influence or Control

The right to exercise significant influence or control is a right which, if exercised, would give rise to the actual exercise of significant influence or control. In the context of a company, a person may hold a right to exercise significant influence or control due to a variety of circumstances, including:

• The provisions of a company’s constitution.
• The rights attached to the shares or securities that a person holds.
• A shareholders’ agreement, some other agreement or otherwise.

Such rights may result in that person being a PSC in relation to the company, regardless of whether they exercise that right.

Condition 4

a. Right to exercise significant influence or control – Company

According to the guidance, the term ‘absolute’ is used in relation to decision rights or a veto to mean that a person can make or veto a decision without reference to or collaboration with anyone else.

1. 1. 1. Absolute Decision Rights
         • Where a person has absolute decision rights over decisions related to the running of the business of the company, such as:
           • Adopting or amending the company’s business plan.
           • Changing the nature of the company’s business.
           • Additional borrowing from lenders.
           • Appointment or removal of chief executive officer (CEO).
           • Setting or altering profit-sharing, bonus or other incentive schemes for directors or employees.
           • Granting options under a share option or other share-based incentive scheme
      2. Absolute Veto Rights
         • Where a person has absolute veto rights over decisions related to the running of the business of the company, such as:
           • Adopting or amending the company’s business plan.
           • Additional borrowing from lenders.

         The guidance states that where absolute veto rights are held for the purposes of protecting minority interests in the company, they are unlikely, on their own, to constitute ‘significant influence or control’ over the company.

         • Where a person holds absolute veto rights over the appointment of the majority of directors, meaning those directors who hold a majority of the voting rights on all or substantially all matters.

b. Actually exercises significant influence or control – Company

According to the guidance, all relationships that a person has with the company or other individuals who have responsibility for managing the company should be taken into account to identify whether the cumulative effect means that they do actually exercise significant influence or control.

For example, a director who also owns important assets (such as intellectual property rights) or has vital relationships that are important to the running of the business and who uses this additional power to influence the outcome of decisions related to the running of the business of the company.

A person would exercise “significant influence or control” if:

• They are significantly involved in the management and direction of the company, such as a non-board member who regularly or consistently directs or influences a significant section of the board, or a person who is regularly consulted on board decisions and whose views influence decisions made by the board. This would include a person who falls within the definition of ‘shadow director’ under section 251 of the Companies Act 2006.
• Their recommendations are always or almost always followed by shareholders who hold the majority of the voting rights in the company, when they are deciding how to vote, such as a company founder who no longer has a significant shareholding in the company.

Condition 5

a. Right to exercise significant influence or control – Trust or Firm

This applies if a person has the right to exercise significant influence or control over the activities of a trust or firm (partnership) that also meets any of the conditions (above) for being a PSC of a company. This would apply regardless of whether the person actually exercises that right.

A person has the right to exercise ‘significant influence or control’ over a trust or firm if that person has the right to direct or influence the running of the activities of the trust or firm, such as the right to:

• Appoint or remove any of the trustees or partners, except through application to the courts or following a breach of fiduciary duty by the trustees.
• Direct the distribution of funds or assets.
• Direct investment decisions of the trust or firm.
• Amend the trust or partnership deed.
• Revoke the trust or terminate the partnership.

b. Actually exercises significant influence or control – Trust or Firm

• A person is likely to exercise significant influence or control over a trust or firm if they are regularly involved in the running of the trust or firm. For example, a person who issues instructions to the trustees or members of the firm that are generally followed. This may be a settlor or beneficiary who is actively involved in directing the activities of the trust.
• A person who controls the management or activities of a limited partnership would be considered a person with significant influence or control over the firm.

Excepted roles with respect to Companies and Trusts or Firms

The guidance provides a non-exhaustive list of roles and relationships that would not, on their own, result in that person being considered to be exercising significant influence or control for the purposes of the fourth or fifth conditions, including:

• Professional lawyers, accountants or advisers
• Lenders or commercial counterparties
• Regulators, liquidators, or employees acting in the course of their employment.
• Directors acting only within the normal scope of their role.

However, if the role of such a person differs significantly from the norm or forms part of a wider pattern of influence, they may still be regarded as a PSC.

Next steps

The draft Companies House Guidance aims to:

• Make PSC identification clearer.
• Reduce ambiguity around significant “influence” and “control”.
• Give companies a practical set of examples to follow.

It reinforces that PSC status isn’t just about shareholdings – power and influence are equally significant.
This Guidance is still in draft and awaits parliamentary approval. If parliament raises no objections within 40 days, the guidance will be formally issued. Until then, the old guidance remains in force.

The post UK PSC Rules Explained: New Guidance on Identifying Persons with Significant Control (PSCs) appeared first on The Sovereign Group.

The 2025 UK Budget had less of an impact on private client planning than feared.

This Webinar provided an update on private client tax planning for UK tax residents following last week’s Budget and the draft Finance Bill 2026 (to be released before the Webinar).

The topics covered were:

1. Overview of UK Property Planning (following announcement of increase in IT rates on property income from April 2027).
2. Family Investment Companies (considering impact of higher tax rates on dividend income from April 2026).
3. Excluded Property Trusts (EPTs); identify which existing EPTs will benefit from the relief announced in the Budget. New EPTs: eligibility, structure and benefits.
4. Overseas life insurance bonds. These were not impacted by the Budget and will continue to provide an income tax and capital gains tax deferral mechanism for all UK residents.
5. Q&A

Speakers

Simon Denton Managing Director | Sovereign (UK) Limited

Laurence Lancaster LLB, LLM, TEP | Barrister-at-law | Group Head of Tax

Click below to view the webinar

The post UK Budget 2025: Private Client Planning Impact Assessment appeared first on The Sovereign Group.

UK Chancellor Rachel Reeves delivered her second Budget on 26 November. The measures in the Budget amount to £26 billion in tax rises, setting the UK on a path to reach an all-time high tax burden of 38.3% of GDP by 2030/31, more than five percentage points above the pre-pandemic level of 32.9% in 2019/20.

The most significant developments centred on a continued focus on personal taxation, rather than businesses. While the Chancellor did not raise income tax rates, the freeze in income tax thresholds will bring more basic-rate taxpayers into higher-rate tax bands, known as ‘fiscal drag’. This process is exacerbated by the freezing of national insurance allowances and inheritance tax thresholds.

The key tax announcements for individuals and businesses are summarised below.

Personal Income Tax

Income Tax Thresholds

Freeze on income tax thresholds extended from 2028 to 2031. All income tax and equivalent National Insurance thresholds are to be maintained at their current level until 2031. The previous Conservative government had frozen personal tax thresholds from 2021 to 2028.

As a result, tax bands in England, Wales and Northern Ireland will remain at the following levels until the end of the 2029/30 tax year:

• Personal Allowance 0% – up to £12,570.
• Basic rate 20% – £12,571 to £50,270.
• Higher rate 40% – £50,271 to £125,140.
• Additional rate 45% – over £125,140.

Property, Savings and Dividend Income

Dividend tax rates will increase from 8.75% and 33.75% to 10.75% and 35.75% respectively for basic and higher rate taxpayers with effect from April 2026.  Additional rate dividend tax will remain unchanged at 39.35%

Savings and Property income tax will increase from 20%, 40% and 45% to 22%, 42% and 47% for basic, higher and additional rate taxpayers with effect from April 2027.

‘Mansion’ Tax

High Value Council Tax Surcharge (HVCTS) – from April 2028, owners of properties identified as being valued at over £2 million by the Valuation Office at 2026 prices will pay a recurring annual charge on top of their current council tax. There will be four price bands:

• Property valued at £2 million to £2.5 million – £2,500 per year.
• Property valued at £2.5 million to £3.5 million – £3,500 per year.
• Property valued at £3.5 million to £5 million – £5,000 per year.
• Property valued at £5 million or more – £7,500 per year.

The HVCTS will be administered alongside existing Council Tax by local authorities. The charges will all be uprated by Consumer Prices Index (CPI) inflation each year from 2029-30 onwards.

The government will consult on a full set of reliefs and exemptions, as well as proposed rules for more complex ownership structures including companies, funds, trusts and partnerships.

Excluded Property Trusts

The government will introduce a £5 million cap on the 10-yearly 6% inheritance tax (IHT) charges that can apply to relevant property trusts that were established by non-UK domiciled individuals prior to 30 October 2024, even where that settlor has now acquired long-term-resident (LTR) status in the UK. This change will be relevant for non-UK domiciled individuals with pre-existing trust structures that hold assets more than £83 million.

Temporary Non-Residence (TNR)

From 6 April 2026, all dividends received from close companies by a non-resident shareholder will be charged to tax on return to the UK during a period of temporary non-UK tax residence. Previously, under the TNR rules there was no charge to UK tax if a distribution or dividend was made from ‘post departure trade profits’ – profits that accrued to a company after the individual had left the UK.

Pensions and Salary Sacrifice

From April 2029, the government will restrict the amount of pension contributions that can benefit from National Insurance savings under salary sacrifice arrangements to £2,000 per employee. Contributions above the cap will be taxed in the same way as other contributions. However, there are no changes to the tax relief available on these contributions.

Voluntary National Insurance Contributions

Currently individuals living and working overseas can choose to pay Class 2 Voluntary National Insurance Contributions (VNICs) at the rate of £3.50 per week to ensure their state pension records are fully paid up. It was also only necessary to have lived in the UK for three years prior to be able to access the UK state pension.

From 6 April 2026, access to Class 2 VNICs will be abolished. Non-UK residents will only be able to utilise the Class 3 VNICs rate and, to qualify, will have to have been resident in the UK for ten years prior. The rate of Class 3 VNICs will also increase from £17.75 to £18.40 per week, or £956.80 per annum from 6 April 2026.

Dividend Tax Credit for Non-UK Residents

The government announced that the notional tax credit provided of 8.75% for non-UK residents who receive UK dividends will be abolished with effect for dividends received on and after 6 April 2026.

Individual Savings Allowance (ISA)

The ISA cash limit will be reduced from £20,000 to £12,000 within the overall £20,000 allowance from 6 April 2027. Those over the age of 65 will be able to maintain the full £20,000 cash ISA allowance. However, the overall allowance of £20,000 per year is unchanged, so savers can still spread their money across multiple ISA accounts up this limit.

Inheritance Tax

The inheritance tax (IHT) nil-rate band and residence nil-rate band will remain frozen until April 2031.

Agricultural and Business Property Relief

The £1 million allowance for the 100% rate of agricultural property relief (APR) and business property relief (BPR), which will come into effect on 6 April 2026 for IHT purposes, will be transferable between spouses and civil partners. Previously assets had to be passed to children on first death. The combined allowance for the 100% rate of APR and BPR will be fixed at £1mn until April 2031.

IHT Avoidance

The government has announced it will legislate to prevent IHT avoidance through certain loopholes, including:

• From 6 April 2026, UK agricultural property held via non-UK entities will be ‘looked through’ and treated as UK-situated. Aimed at preventing the conversion of UK agricultural property, which is subject to IHT, into shares in a non-UK company, which is not subject to IHT when owned by individuals who are not long-term residents or by trusts, this brings agricultural property into line with residential property.
• From 26 November 2025, new provisions are introduced to prevent trustees from avoiding the 6% IHT exit charge when non-UK property goes out of scope of IHT by bringing assets to the UK prior to a settlor ceasing to be a long-term resident and then taking the assets offshore again.
• From 26 November 2025, restricting the IHT charity exemptions on gifts made by charitable trusts directly to UK charities unless they meet the wider definition of a charity under existing legislation.

Business Taxation

Employee Ownership Trusts

With immediate effect, the government will reduce capital gains tax (CGT) relief on disposals to employee ownership trusts (EOTs) from 100% to 50%. The Chancellor stated that this change will address the system which has been “creating a route for gains to go completely untaxed when businesses are sold”.

Non-Resident Capital Gains Tax (NRCGT)

The government has clarified that the sale of a UK property rich company (derives more than 75% of its value from UK land), will now specifically cover the cells of overseas protected cell companies.

From 26 November 2025, each cell within a cell company is to be treated like a standalone company for NRCGT purposes so that the cell itself is tested for UK property richness when disposed. These rules apply equally to overseas individuals and companies making disposals of cell companies.

Venture Capital

The venture capital schemes, including the venture capital trust (VCT) and the enterprise investment scheme (EIS), provide incentives for qualifying investors looking to invest in early-stage, higher-risk UK companies.

From April 2026, the investment limits for EIS and VCT companies will be increased to £10 million and for knowledge intensive companies will be increased to £20 million, and the company lifetime limit for receipt of such investments will increase to £24 million and £40 million respectively.

From April 2026, the gross assets threshold will rise to £30 million prior to an investment and £35 million after investment under any of these schemes. However, the rate of VCT income tax relief will fall from 30% to 20%.

Enterprise Management Incentive (EMI)

The size limits for eligible companies will increase from April 2026 as follows:

• Gross assets will increase from £30 million to £120 million.
• The number of employees will increase from 250 employees to 500 employees.

For all eligible companies, the size of the overall option pool will increase from £3 million to £6 million, doubling the number of shares over which EMI options can be granted. Time limits on the exercise period will also increase from 10 years to 15 years. Existing option agreements can be amended to take this change into account.

Diverted Profits Tax

The government will abolish the Diverted Profits Tax (DPT) and replace it with a simplified approach integrated into the corporation tax regime. The new rules will focus on unassessed transfer pricing profits, removing the separate DPT charge and aligning profit attribution with OECD standards. This change aims to streamline compliance, reduce complexity and ensure that UK tax rules remain competitive while effectively countering profit diversion. Transitional guidance will be published to help businesses adapt to the new framework and will apply from 1 January 2026.

UK Listing Relief

A three-year exemption from Stamp Duty Reserve Tax will be introduced for companies listing on the London Stock Exchange (LSE) from 27 November 2025. Investors currently have to pay 0.5% stamp duty when they buy UK-listed shares, but this charge will be waived for three years from the point the company lists on a UK regulated market.

Anti-Tax Avoidance

The government is taking further steps to close the tax gap and said changes will raise £2.4 billion in additional tax revenue in 2029-2030 by collecting more unpaid taxes and modernising the tax system. It aims to improve how HMRC uses information from third parties and build new technology to increase the use of data-driven prompts to help taxpayers avoid errors when submitting tax returns.

Share Exchanges and Company Reorganisations

It is to amend the anti-avoidance rules to counter the no disposal treatment applying to share exchanges and company reorganisations. These amendments will ensure that where a shareholder enters into a share exchange or company reorganisation and one of the main purposes of this is to secure the shareholder a tax advantage, it will now be caught by the anti-avoidance rules.

Informant Rewards

The government is to strengthen the reward scheme for informants who provide information that allows HMRC to tackle high-value avoidance or evasion. For cases where tax over £1.5 million is recovered, HMRC will pay rewards up to 30% of the additional tax collected that would otherwise have gone unpaid.

Small Business Evasion

It will establish a new dedicated small business evasion and enforcement team and deploy 350 HMRC criminal investigators to carry out more targeted criminal interventions tackling the most serious fraud and evasion by small businesses.

Promoters of Tax Avoidance

Following consultation, the government will legislate in finance bill 2025-26 to further target promoters of tax avoidance to allow HMRC to shut schemes down more quickly. Subject to the finance bill, the government will introduce enhanced powers and sanctions to tackle tax advisers who facilitate non-compliance from 1 April 2026.

The Disclosure of Tax Avoidance Schemes (DOTAS) and Disclosure of Tax Avoidance Schemes for VAT and Other Indirect Taxes (DASVOIT) civil penalty regimes will be updated so HMRC can issue penalties directly, without tribunal approval, speeding up enforcement.

However, the government said it will not regulate tax advisers and will instead work in partnership with the sector to raise standards in the tax advice market.

Rogue Directors

It is investing £25 million over the next five years to recruit additional Insolvency Service staff to disqualify more rogue directors. It will also amend the Company Directors Disqualification Act 1986 to extend the circumstances in which directors who break the law can be disqualified.

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With effect from 1 September 2025, members of the public to Companies House to access trust information held on the UK Register of Overseas Entities (ROE) that is not publicly disclosed.

Since the ROE was first launched in August 2022, overseas entities which hold or acquire interests in UK land are required to submit certain information about their beneficial owners with Companies House, which is freely accessible to the public. However, where an entity’s beneficial owner is the trustee of a trust, the information provided was previously only shared with HMRC and certain law enforcement agencies.

Under regulation 4 of the Register of Overseas Entities (Protection and Trusts) (Amendment) Regulations 2025, which were approved earlier this year, members of the public can now apply to Companies House for disclosure of trust information associated with a single overseas entity for a fee of £55 per entity.

Certain limitations still apply, depending on the sensitivity of the information concerned, as follows:

• If the application either relates to more than one overseas entity or would result in the disclosure of trust information relating to an individual under the age of 18, the information will not be released unless the applicant is able to demonstrate a ‘legitimate interest’ (such as investigating money laundering, tax evasion, terrorist financing or sanctions breaches) in the information.
• In cases where the legitimate interest test does not apply, the information will be released only if the applicant can provide certain details, including the name and ID number of the overseas entity, as well as the name of any trusts to which the relevant trust information relates.
• The information will not be released if a successful ‘protection application has been made on grounds that its release would put the relevant individuals at risk of intimidation or violence.

Excepting these restrictions, Companies House undertakes to release the information within five days, although it may impose conditions on the use or further disclosure of the information.

Where available, the information disclosed will include the name of the trust and the date it was created and, if relevant, the date on which it ceased to be involved with the overseas entity.

Where a beneficial owner of an overseas entity is a trustee, the ROE holds extensive information in relation to the trust and its beneficiaries including the relevant individuals’:

• Name
• Month and year of birth
• Date they became involved in the trust, if relevant
• Date they ceased to be involved in the trust, if relevant
• Nationality
• Correspondence or service address
• Role in the trust – beneficiary, settlor, grantor or interested person.

Corresponding information will be provided where the trustee is an organisation rather than an individual, as well as its legal form and governing law.

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The UK National Crime Agency reported, on 16 July, that 11,500 UK companies had been struck off Companies House register over the last year for failure to comply with the Registered Office requirements under the Companies Act 2006.

The project, coordinated by the National Economic Crime Centre, was designed to identify and enable enforcement action against high-risk company incorporation locations and corporate entities believed to be enabling criminality in the UK and overseas.

It involved the National Crime Agency, Companies House, HM Revenue & Customs, the Insolvency Service, the Financial Conduct Authority, the Office for Professional Body Anti-Money Laundering Supervision, the Home Office and the UK police.

As part of the project, police visited 11 addresses where 30 high risk trust and company service providers operated. They identified that no real business activity was taking place and that company formation agents had failed to comply with relevant requirements under the Companies Act.

As a result, key individuals involved in company formation have been barred from making further registrations, criminal referrals have been made to the Insolvency Service, three high risk trust and company service providers are to be closed, with a further 27 facing enforcement action, and significant criminal property has been identified for law enforcement civil recovery action.

The activity forms a part of wider cross-government efforts to prevent the abuse of UK corporations by criminals. Landmark reforms under the Economic Crime and Corporate Transparency Act are coming into force at Companies House, including the new Authorised Corporate Service Provider regime and forthcoming ID Verification requirements.

“We recognise that many third-party agents provide legitimate services and play an active role in the creation and management of UK companies. However, we also know that some agents are complicit in various forms of criminality by wilfully abusing and exploiting the system,” said Companies House Director of Intelligence and Law Enforcement Engagement Martin Swain.

“I am pleased that Companies House is playing a much greater role in helping to disrupt this type of activity and reduce economic crime – as our role here shows. We will continue to support our law enforcement and regulatory partners in identifying, targeting and stopping abuse of the company register.”

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UK Companies House has confirmed that the legal requirements for directors and people with significant control (PSCs) of companies to verify their identities will begin on 18 November.

This new requirement was brought in under the UK’s Economic Crime and Corporate Transparency Act (ECCTA), which introduced the biggest changes to Companies House since corporate registrations were first established in 1844.

Identity verification is to be phased in over a 12-month transition period, as follows:

• New directors will need to verify their identity to incorporate a company or be appointed to an existing company.
• Existing directors will need to confirm they have verified their identity at the same time as they file their next annual confirmation statement during the 12-month transition period.
• Existing PSCs will need to verify their identity in line with an appointed day within 12 months of the commencement of mandatory identity verification on 18 November.

Companies House has estimated that that over six million individuals will need to verify their identity by mid-November 2026 and is therefore encouraging individuals to verify their identities as early as possible. From 18 November, directors and PSCs will be able to check the Companies House register to see identity verification due dates for all their roles.

Individuals can verify their identity either directly with Companies House or through an Authorised Corporate Service Provider (ACSP). An ACSP, also known as a Companies House ‘authorised agent’, is a business that is covered by Money Laundering Regulations in the UK. This includes professional service providers such as accountants and solicitors, as well as Trust and Company Service Providers (TCSPs) such as Sovereign Corporate & Trustee Services Ltd (SCATS).

Chester-based SCATS was officially registered as an ACSP with Companies House in March this year, enabling it to carry out identity verification (IDV) checks for company directors and PSCs. To register as an ACSP, applicants must be supervised within the UK by an Anti-Money Laundering (AML) supervisory body. When registration has been completed, ACSPs receive a digital account and a unique identity number.

Also from 18 November, all companies will need to provide Companies House with a registered email address to enable it to communicate any important changes to company law or requirements for a company’s compliance. If you use the email address of a third-party agent, such as SCATS, as your registered email address, they must forward you all your company’s emails.

From Spring 2026, third-party providers will further be required to be registered as an ACSP to make any filings to Companies House on behalf of their clients.

For international directors or clients unfamiliar with the UK system, Sovereign’s ACSP status offers a straightforward route to staying compliant with the evolving demands of UK corporate compliance. For any business with UK-linked structures, especially those involving non-resident directors or shareholders, it is critical to understand and navigate these changes.

SCATS is also a Companies House Assured Agent. This means we are positioned to assist with the Register of Overseas Entities (ROE), which was introduced to identify the beneficial owners of overseas entities (OEs) that own property or land in the UK. We can therefore assist with everything from initial ROE registration and IDV, to filing update statements and verifying structural changes.

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The Isle of Man and UK governments issued a joint statement on 27 May following their agreement to explore ways to crack down on promotors of tax avoidance schemes.

The UK and the Isle of Man were amongst the early adopters of the OECD Common Reporting Standard, which facilitates the automatic exchange of financial account information between jurisdictions, and both are working on the Crypto-Asset Reporting Framework which will see the automatic exchange of information on crypto-assets.

Both jurisdictions have also recently implemented measures in relation to the Global Base Erosion Rules under the OECD’s Pillar 2 Global Minimum Tax.

“Both governments are committed to taking robust action to deter and disrupt the activities of those who seek to promote marketed tax avoidance schemes that threaten our tax systems and the reputations of our well-established and globally attractive service sectors,” said the joint statement.

“Recognising the need to go further and noting the UK government’s ongoing consultation on steps to crack down on promoters of marketed tax avoidance schemes, we are pleased that we have been able to agree today to explore ways to further enhance information flows, joint working, and other ways in which tangible benefits for both jurisdictions can be achieved.

“We look forward to continuing our partnership and achieving tangible results in our shared objective of combatting tax avoidance and evasion,” it concluded.

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The UK government issued the Protection and Disclosure of Personal Information (Amendment) Regulations 2025 on 15 May to further extend the range of circumstances in which individuals can apply to the Registrar of Companies to protect their personal information where it appears on the public register were published in draft.

The draft regulations expand the existing protection regime by providing that provide that individuals can apply for the day of their date of birth, their signature and, in the case of directors of companies, their business occupation to be protected from public inspection.

They also amend the Companies (Disclosure of Address) Regulations 2009 to widen the protection of usual residential address regime to allow any individual to apply to have their usual residential address made unavailable for public inspection.

When fully in force, an individual will therefore have the right, subject to certain exceptions, to apply for their usual residential address, signature, day of date of birth and business occupation to be protected, without needing to justify the application or meet qualifying criteria.

It is intended that the regulations will come into force on 21 July 2025. If they are not made before 21 July 2025, they will come into force the day after they are made.

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