Most gifts made during a person’s lifetime are not subject to tax at the time of transfer. These gifts, known as “potentially exempt transfers” (PETs), can become fully exempt if the donor survives for more than seven years after making the gift.

If the donor passes away within three years of the gift, the inheritance tax is treated as if the gift was made upon death. A tapered relief applies if death occurs between three and seven years after the gift, reducing the tax liability based on the time elapsed.

The effective tax rates on the amount exceeding the Inheritance Tax nil rate band are as follows:

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%7 or more years before death: 0%

However, these tapered rates do not reduce the tax on a lifetime chargeable transfer below the amount initially chargeable and offer no benefit for transfers within the nil rate band.

We strongly recommend maintaining a record of any PETs you make, including details of exemptions used and any regular gifts made out of surplus income.

You can typically claim tax relief on private pension contributions up to 100% of your annual earnings, subject to certain limits. Tax relief is applied at your highest rate of income tax, meaning:

Basic rate taxpayers receive 20% pension tax reliefHigher rate taxpayers can claim 40% pension tax reliefAdditional rate taxpayers can claim 45% pension tax relief

For basic-rate taxpayers, the initial 20% tax relief is usually applied by the employer. Higher and additional rate taxpayers can claim the extra relief through their self-assessment tax return.

Taxpayers can claim on their self-assessment return for private pension contributions as follows:

20% relief on income taxed at 40%25% relief on income taxed at 45%

Alternatively, taxpayers can contact HMRC to claim the relief if they pay 40% income tax and do not submit a self-assessment return.

These rates apply in England, Wales, and Northern Ireland, but there are some regional variations for Scotland.

There is an annual allowance of �60,000 for pension tax relief. Taxpayers can carry forward any unused allowance from the previous three tax years, provided they made pension contributions during those years. The lifetime limit for pension tax relief was abolished as of 6 April 2023.

HMRC together with the Department for Work and Pensions (DWP) have issued a press release urging tens of thousands of people to check if they are eligible to boost their State Pension utilising Home Responsibility Protection (HRP).

This HRP scheme has helped protect parents’ and carers’ State Pension. HRP reduces the number of qualifying years a person with caring responsibilities needed to receive, to secure a full basic State Pension. HRP was replaced by National Insurance credits in 2010.

Between 6 April 1978 and 5 April 2010, most eligible individuals automatically received Home Responsibilities Protection (HRP). However, this did not apply in all cases, and it is still possible to apply for HRP if you believe it’s missing from your National Insurance (NI) record. During Pensions Awareness Week, HMRC is encouraging those affected-primarily women at or near State Pension age-to check their NI records for gaps and potentially increase their State Pension at no cost.

If HRP is missing from someone’s NI record, it does not necessarily mean that their State Pension calculation is wrong, but it could be, especially if they took significant time-out from employment to raise a family.

The Exchequer Secretary to the Treasury said:

‘The State Pension is the foundation of state support for people in retirement. We are urging people to check their National Insurance records to make sure they will receive the pension they deserve.’

If a claim is successful, HMRC will update the individual’s NI record, and the DWP will recalculate their State Pension entitlement. Depending on the individual’s situation, their State Pension entitlement may increase or stay the same.

There are late filing penalties which are designed to encourage companies to file their accounts and reports on time. All companies, private and public, large or small, trading or non-trading must send their accounts to Companies House. A penalty is automatically imposed by Companies House if the accounts are late.

The table of penalties for late submission is as follows:

How late are the accounts delivered Penalty – Private CompanyPenalty – PLCNot more than one month�150�750More than one month but not more than three months�375�1,500More than three months but not more than six months�750�3,000More than six months�1,500�7,500

Failure to file confirmation statements or accounts is a criminal offence which could result in the directors being personally fined in the criminal courts. Late penalties which are unpaid will be referred to collection agents and could result in a County Court judgement or a Sheriff Court decree against the company.

It is possible to appeal against a penalty, but it will only be successful if the appellant is able to demonstrate that the circumstances of the late filing were exceptional, for example, a fire destroying records a few days before the filing deadline.

According to Companies House guidance, an appeal is unlikely to be successful if it’s based on the following examples:

your company is dormantyou cannot afford to payyour accountant was illyou relied on your accountantthese are your first accountsyou are not familiar with the filing requirementsyour company or its directors have financial difficulties (including bankruptcy)your accounts were delayed or lost in the postthe directors or LLP members live (or were travelling) overseasanother director or LLP member is responsible for preparing the accounts.

More than 670,000 18-22 year olds, yet to claim their Child Trust Fund, are reminded to cash in their stash as HM Revenue and Customs (HMRC) reveals the average savings pot is worth �2,212.

Child Trust Funds are long term, tax-free savings accounts which were set up, with the government depositing �250, for every child born between 1 September 2002 and 2 January 2011. Young people can take control of their Child Trust Fund at 16 and withdraw funds when they turn 18 and the account matures.

The savings are not held by government but are held in banks, building societies or other saving providers. The money stays in the account until it’s withdrawn or re-invested.

If teenagers or their parents and guardians already know who their Child Trust Fund provider is, they can contact them directly. If they do not know where their account is, they can use the online tool on GOV.UK to find out their Child Trust Fund provider. Young people will need their National Insurance number – which can be found easily using the HMRC app –  and their date of birth to access the information.

Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive, said:

‘Thousands of Child Trust Fund accounts are sitting unclaimed – we want to reunite young people with their money and we’re making the process as simple as possible.

‘You don’t need to pay anyone to find your Child Trust Fund for you, locate yours today by searching ‘find your Child Trust Fund’ on GOV.UK.’

Third-party agents are advertising their services offering to search for Child Trust Funds and agents will always charge – with one charging up to �350 or 25% of the value of the savings account.

Using an agent can significantly reduce the amount received, is likely to take longer and customers still need to supply them with the same information they need to do the search themselves.

Gavin Oldham, The Share Foundation, said:

‘If you are 18-21 years old, the government would have put money aside for you shortly after birth. This investment would have grown quite a bit and it’s in your name. The Share Foundation has linked over 65,000 young people to their Child Trust Fund accounts. It’s easy and free to find out where your money is. Go to  findCTF.sharefound.org or GOV.UK to locate it today.’

In the last year more than 450,000 customers, with just their National Insurance number and date of birth, used the free GOV.UK tool to locate their Child Trust Fund.

There is no present mansion tax or wealth tax in the UK, but there is speculation that the Labour Party may be tempted to introduce either or both as part of Rachel Reeves’ first budget to be announced 30th October 2024.

Basically, it would involve taxing individuals or properties based on the value of their assets or properties. Here’s an overview of how each might work:

1. Mansion Tax

A mansion tax would specifically target high-value residential properties, typically above a certain threshold, with owners required to pay an annual tax based on the property’s value. Here’s how it might be structured:

Threshold: Often suggested for properties valued at �2 million or more.Rate: The tax rate could be progressive, meaning properties of higher value would incur a higher percentage of tax. For instance, properties valued between �2-5 million might be taxed at one rate, and those over �5 million at a higher rate.Valuation: Property values could be reassessed regularly, similar to how council tax bands are set. This would require significant administrative effort to maintain accurate property valuations.Objective: The mansion tax is often proposed to raise revenue from the wealthiest property owners, promoting fairness by redistributing tax burdens from those with lower-value homes.

2. Wealth Tax

A wealth tax would be a broader tax on an individual’s total assets, not just property. This could include real estate, investments, savings, and valuable personal assets like art or jewellery. Here’s how it might work:

Threshold: There would be a minimum threshold, such as �1 million or �5 million in net assets, above which individuals would be taxed.Rate: Like income tax, a wealth tax could have progressive rates (e.g., 1% on net wealth over �1 million, 2% on wealth over �5 million, etc.).Assets Covered: It would likely cover all global assets for UK residents, including property, shares, and business ownership. For non-domiciled residents, the tax might apply only to UK-based assets.Challenges: Wealth taxes are complex to implement as they require accurate and regular valuations of diverse types of assets. Tax avoidance and capital flight are common concerns with wealth taxes, as wealthy individuals might shift assets offshore or find legal loopholes to avoid the tax.

Potential Issues and Benefits

Administrative Complexity: Both a mansion tax and wealth tax would require significant resources for accurate valuation and enforcement. A wealth tax is particularly complex due to the wide range of assets involved.Equity and Redistribution: Proponents argue that these taxes would improve fairness by ensuring that wealthier individuals contribute more to public services. They would help to address income and wealth inequality.Economic Impact: Critics suggest that such taxes could deter investment, drive wealthy individuals out of the country, or reduce property values in high-end markets. There is also concern that middle-income households with high-value homes, but limited liquidity, could be adversely affected by a mansion tax.

Although these proposals have been floated by political parties like Labour, they have not yet been enacted in the UK due to political and economic concerns. However, similar systems are in place in other countries, such as France’s wealth tax (before it was mostly replaced by a property tax) and Switzerland’s wealth taxes.