How did the Autumn Statement impact FHL’s?

In the weeks prior to the Autumn Statement, there had been rumours of an extension to the nil rate band for Inheritance Tax (IHT), but as it transpired, there was nothing mentioned. That ensures that any family succession or estate planning can proceed without the inconvenience of rules changes, with various IHT reliefs also left unaltered.

HMRC position on the availability of Business Property Relief (BPR) was further reinforced following the Butler v HMRC (2023) case decision for which BPR was denied. Whilst not an FHL business, it does give insight into many issues FHL operators may face on a BRP claim. We recommend all FHL business operators to continually assess the services being offered and seek professional advice if they believe IHT to be an issue.

There had been some significant concern that the Capital Gains Tax (CGT) regime was to be changed, and indeed this remains a concern were there to be a change in government (with IHT also potentially under scrutiny). However, the current rules remain in place, for now, meaning that the rates and reliefs applied to disposals, gifts and transfer are the same. With capital gains rates being attractive currently, longer term planning in family business can be reviewed with more certainty, for the moment anyway. FHL properties can benefit significantly from CGT reliefs that other property businesses do not. This can include access to 10% tax rate on disposal for gains up to £1M. Alternatively, FHL properties can also qualify for gift holdover relief, allowing properties to be passed down the generations without an exposure to CGT. This can aid succession or allow other family members to be involved in helping the business grow and succeed.

In capital taxes planning, silence is golden so make sure you consider your planning while rates and reliefs are attractive, as one cannot guarantee this will always be the case. For more information or advice based on your circumstances, please get in touch by calling one of our offices or emailing leisure@eqaccountants.co.uk.