Why the pension death tax could destroy thousands of family businesses
The move by the chancellor, Rachel Reeves, to charge death tax on pensions could force the liquidation of businesses, jeopardising jobs and the broader economy, according to the wealth manager Evelyn Partners. It said that about 15,000 businesses are at risk.
From April 2027 unspent pension assets will be subject to inheritance tax and, crucially, pension schemes will have to settle their share of the tax bill within six months of the pension holder's death.
This shift, which was revealed in the autumn budget, will hit business owners who have held commercial property — such as company premises, workshops or machinery — within their self-invested personal pensions (Sipps) or small self-administered schemes.
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The Sun
28 minutes ago
- The Sun
If you thought Labour's first year in power was bad, here's how things could get EVEN WORSE in next 12 months
WELL, it wouldn't be a proper party without some tears, a massive hit to Sterling and some fake smiles and waves the morning after. If this Labour Government's birthday week was an episode of Yes Minister or The Thick Of It, viewers would have said the script writers had gone too far and the chaos was too much for the realms of believability. 2 If you were not pinching yourself last week watching power drain away from a PM with a majority the size of the moon, or the weeping Chancellor becoming a walking metaphor for Labour's woes, then you really will believe anything. Which made me wonder . . . what could this lot possibly do for an encore? If you thought Season One of the Farce Show was bad, let's have a look in the crystal ball at year two . . . SUMMER LAST year Rachel Reeves insisted 'public services need to live within their means' and promised there would not be a repeat of November 2024's blistering £40billion tax raid, saying clearly: 'I'm not coming back with more borrowing or more taxes.' So when she failed to repeat that promise in the wake of Downing Street's humiliating benefits capitulation last week, she teed up a long, cruel summer of speculation. Taxes are clearly going up to fill yet another giant black hole in the Treasury sums, but which ones? Petrol is currently pretty cheap, so expect the usual suspects to start banging the drum for a hike in fuel duty. Logic would dictate that having peed off pensioners, farmers and employers already, only the most politically scarecrow-brained would declare war on drivers in such a spectacular fashion. But after a year of failing spectacularly to read the room, who knows with this muppet show? There's talk — floated in Labour circles — of a wealth tax on assets over £10million, as if enough wealth creators haven't already scarpered high- tax Britain. Moment Starmer TRIPS as he leaves Downing Street amid welfare fiasco And how many more memos will we get from helpful Deputy PM Angela Rayner on how to soak the rich more? As she is finally given a long-coveted desk in Downing Street, I see plenty of empire building to come from our Ange. Add into the mix not one but two visits from Donald Trump to the UK and there are bear traps aplenty ahead for No10. With the Don in Scotland next month to visit his golf clubs, will football nut Starmer be able to avoid the offer made over lunch in the White House to play 18 holes? And what could go wrong in September's State visit, with lefty Palestine protesters and eco-loons already busy plotting an upset. 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Starmer delayed a reshuffle It's pretty clear that Starmer delayed a reshuffle before the summer break as he works out whether he can keep his Chancellor. It will be weighing heavily on his mind that no PM in modern times who has seen the second most powerful person in the government forced out has gone on to win the subsequent election. But Reeves is running out of road when it comes to her fiscal rules not to increase borrowing for day-to-day spending, and not target the big three personal taxes. Another raid on Capital Gains seems inevitable but that's unlikely to be anywhere near enough to fill what experts say is shaping up to be at least another £20billion black hole. But it doesn't take a fortune teller to know that Reeves' credibility will be precisely zero if she rips up the rules, which seem to be the only thing stopping a full-scale UK debt crisis. The markets have just seen a Labour government incapable of getting even a £5billion cut through Parliament. 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Daily Mail
33 minutes ago
- Daily Mail
Independent distilleries 'threatened' by costs hike
Spirit makers have warned that family-run distilleries are under threat due to Labour's tax raid on their industry. The UK Spirits Alliance, which represents 300 large and small drinks producers and bars, said a British tradition of handing brands down through the generations could soon be a thing of the past as firms are being pushed to the brink by a barrage of cost increases. Duty on gin – which is the UK's favourite spirit by volume sales – increased by 3.65 per cent in February, after a 10.1 per cent increase in 2023, the trade body says. Businesses are also under pressure after Labour's Budget last year, with firms hit by higher wages and National Insurance employer contributions. Karl Mason of Masons Gin in North Yorkshire said: 'We want to pass on a thriving business to our children and grandchildren. But as things stand, distillers are struggling to survive.'
Daily Mail
34 minutes ago
- Daily Mail
ALEX BRUMMER: The folly of Labour wealth taxes
During the run-up to Labour's election a year ago, I had a bruising on-the-air encounter with an LBC radio interviewer. My suggestion was that plans by Rachel Reeves to target wealth would undermine the energy, entrepreneurship and enterprise needed to drive UK growth. The interlocutor insisted it was time we rid ourselves of rich free loaders with little interest in the broader population. The pay gap between those at the top in business and working people has been widening for decades. Tesco boss Ken Murphy picked up £10m last year, which is 431 times that earned by the average worker in the group. As boss of a top FTSE 100 company, everything about Murphy's remuneration is known and explained in ferocious detail in the company's annual report. Research by the London School of Economics shows that the top 1 per cent of taxpayers living in Britain account for 30 per cent of the nation's total income tax take. The targeting of aspiration by Labour is proving an own goal. The outflow of the rich from the UK, some 16,500 people on the last count, harms spending and investment. The elimination of non-domicile privileges began under the Tories. The Chancellor hammered in the last nail. The change is calculated to add £4.2billion to the tax take of the Exchequer in 2026-27 and more in the subsequent two years. She will be fortunate. Rather than stay in the UK and wait for their privileges to vanish, many non-doms already have fled. The current preferred destination is Milan. For the price of £145,000, or equivalent fee to the Italian government, it is possible to circumvent taxes on worldwide income. As wealthy residents depart, property prices in smart central London and sales of luxury goods and services have been punished. The willingness to invest in start-ups, real estate deals, partnerships and trading in Britain is diminished. The City survived Brexit because UK wholesale markets and derivatives trading remained the first choice for European and American dealers. The number of jobs heading towards Europe was far smaller than predicted. When the vice-chairman of Goldman Sachs, Richard Gnodde, was driven offshore this year, one recognised how serious the exits were becoming. Milan, Dubai, Singapore are each growing rich on exiles from investment banks, private equity, and hedge funds. Private plane leasing firm NetJets is doing a roaring trade from billionaires swooping in for a couple of days to complete transactions but leaving before their feet touch the ground. And we wonder why UK posh firms such as Burberry, Smythson and others are having a torrid time. As alluring as soak the rich taxes are to the Angela Rayner wing of the Labour Party, they will not resolve the nation's fiscal problems. Every penny may count in difficult times, but the extra income generated by inheritance tax reforms will be paltry. The dial is going to be shifted by the torrent of wealth, accumulated by baby boomers, as it is released to the next generations. Unfairness in the tax system such as the 'carried interest' loophole exploited by private equity barons should be removed. But the Chancellor and Treasury would do well to recall that there is no group more mobile than the super-rich. Ask Sir Jim Ratcliffe, retailer Sir Philip Green, F1 star Sir Lewis Hamilton et al. They voted with their feet long ago.
