The UK tax conundrum: an adviser’s perspective

Business owners in Northern Ireland are responding to recent tax changes in one of two ways—by strategising or considering a move overseas, writes Gemma Johnson

The last year has seen a wave of strategic reassessments among business owners in Northern Ireland and the wider UK.

A cauldron of changes to inheritance tax (IHT), capital gains tax (CGT) and employer national insurance—alongside the abolition of the non-domiciled regime—have had a significant impact on the UK tax landscape, and we are seeing a similar shift in the priorities of those at the helm of family businesses, in particular.

On the inheritance tax front, from April 2026, Business Property Relief and Agricultural Property Relief will be capped at £1 million per person. Any excess value will attract just 50 percent relief, exposing surplus business value to a 20 percent IHT charge.

For our own clients and the wider business community, this means a fundamental shift in how they manage legacy and liquidity.

Succession planning has taken centre stage. We are seeing a surge in interest in lifetime gifting, trust structures and corporate reorganisations.

Trusts, once considered niche, are now being revisited as practical tools for asset protection and intergenerational planning.

The traditional approach of holding assets until death and relying on reliefs is no longer viable. Advisers are encouraging all those impacted to quantify their IHT exposure and consider earlier transfers, either to family members or into trusts.

Clients are making strategic decisions to prioritise liquidity, where money would previously have been reinvested into their business.

The goal of any good adviser must be to preserve business continuity while managing tax liabilities sensibly.

Capital gains tax and relocation trends

We are seeing an unprecedented shift in the number of wealthy individuals seeking advice on moving abroad, both on a temporary and permanent basis.

With CGT rates at 24 percent and speculation regarding further potential increases, the remittance basis abolished and IHT reforms, many clients are exploring temporary or permanent relocation.

Jurisdictions such as Spain, Malta and the United Arab Emirates are increasingly viewed as better alternatives.

The statutory residence test, tax-efficient business structuring and the timing of business disposals are now frequently topics of conversation.

Employer national insurance and business impact

Alongside headline tax reforms, many business owners are grappling with the financial impact of increased National Insurance rates for employers.

For businesses across the UK, this has translated into a significant rise in employment costs, reshaping business decisions.

Several clients have reported that higher contributions have directly reduced their capacity to reinvest in their businesses.

This is playing out in a more cautious approach to hiring, with many delaying or freezing recruitment plans.

Existing staff are also feeling the effects, as the scope for pay rises narrows in the face of mounting overheads.

These pressures are being passed on to consumers, with rising costs driving higher prices for goods and services.

Preparing for the upcoming UK Budget

This new reality underscores the interconnectedness of tax policy, employment and economic growth.

As businesses absorb additional costs, the need to adapt through restructuring, efficiencies or strategic planning has never been greater.

As the UK Budget approaches on 26 November, there is unsurprisingly a palpable sense of nervousness across the business community.

The unusually late timing of this year’s Budget has fuelled speculation about further tax rises and potential changes to key reliefs, with many expressing concerns over the Government’s need to address a substantial fiscal shortfall.

We have seen a flurry of pre-Budget activity, as clients seek to complete transactions and review their options before any new measures are unveiled.

The lack of clarity regarding UK Chancellor Rachel Reeves’ intentions, combined with recent tax reforms, has left many feeling uneasy about the future, reinforcing the need for proactive, flexible planning.

In practice, we expect to see a continued need for bespoke advice as clients seek to understand their tax profile and options for managing the rising costs of doing business in Northern Ireland.

It is clear that planning is no longer optional for most. Whether navigating the intricacies of trust taxation, evaluating the merits of relocating abroad, or preparing for a business sale, clients need the best advice more than ever before.

Gemma Johnson is Director of Tax at Grant Thornton