Alpha will be writing to all members towards the end of April with details of their Lloyd’s result.
For planning purposes, we will be providing clients with estimates of any Corporation Tax (if applicable) due from Namecos, and the annual Fidentia management fee, both of which will be due for payment at the end of September. You may wish to make provision for these liabilities when considering the options you wish to take.
As a reminder, Lloyd’s have instructed us that they will no longer convert currency. Fidentia can convert the funds once received to the HSBC LLV accounts using our competitive broker ALT 21 Limited.
If you have changed your default bank account, then please let us know as soon as possible so that we can verify the account prior to funds being released.
Fidentia will write directly to those LLPs which contain more than one member, with a breakdown of how their profit or loss will be split in line with each member’s profit and loss shares.
We have recently filed all of our members’ 2026 annual confirmation statements and ‘Declaration of Compliance’ with Companies House and Lloyd’s, respectively.
We wish to remind you, if you are considering making any changes to the structure of your underwriting vehicle, such as the addition of new directors/shareholders/members, or changes to companies or trusts that may be connected to the vehicle (for example changes to the shareholders or trustees), you must contact us before any such changes are made in order that we may arrange an application to Lloyd’s for their approval.
Lloyd’s have specific rules regarding the structure of a vehicle, and it may not be possible to make a change. Failure to obtain this pre-approval will result in Lloyd’s applying a fine and even the requirement to unwind any change made.
If you have any queries regarding any matters, please contact us.
As has been widely reported, significant changes were announced in the 2024 Autumn Budget to Business Property Relief. Under existing rules, Lloyd’s underwriting qualifies for business property relief, which has historically made the IHT bill on Lloyd’s Underwriting assets nil. The 30 October 2024 budget proposes changes to that, whilst still lower than the 40% rate levied for listed investments or property assets, inheritance tax will now be charged at 20% above an individual’s first £1m of BPR assets. Following the announcement on 23 December 2025, this £1m limit has increased to £2.5m, and is transferrable between spouses if not used on first death. These IHT changes are due to come in from April 2026.
Another impact on inheritance tax is that, from April 2027, pensions will start to be included in the individual’s IHT chargeable estate, taking that pot from a tax rate of 0% to 40%.
For employers, from April 2025, and remaining in place for 2026/27 tax year, the starting threshold at which Employer National Insurance contributions are payable on employee salaries reduced to £5,000. In addition, from the same date, the Employer rate increased to 15%, from 13.8%. The Employer’s Employment Allowance did, however, increase to £10,500 per annum, from £5,000. The eligibility cap of £100,000 of Employer contributions was removed from April 2025.
The Employee Class 1 and Self-employed Class 4 National Insurance rates remain at 8% and 6% respectively.
From April 2026, the basic rate of tax on dividends increases to 10.75%, and the higher dividend rate increases to 35.75%. From April 2027, the basic rate of income tax on property and savings income increases to 22%, the higher rate to 42%, and the additional rate to 47%.
The dividend allowance remains at just £500 per annum.
As a reminder, there was a significant change to corporation tax rates, which took effect from 1 April 2023.
From this date, the corporation tax rates are as follows:
In addition, when considering the above profit levels, associated companies are also brought into consideration. This is also important when considering corporation tax payments on account, which start at £1.5m, pro-rated down for the number of associated companies. The definition of associated company is now much wider than it was, and ‘associate’ includes a number of close relations. This is a tricky area so please ask your usual adviser if at all unsure.
Individuals are entitled to an annual exemption against capital gains arising on the disposal of qualifying assets each year. The annual amount for the tax year ended 5 April 2027 is £3,000. The capital gains tax reporting threshold, for instances where disposals occur but there is no taxable gain, is now set at £50,000 per annum. For total proceeds received in excess of this, even if no taxable gains arise, the disposals must still be reported.
There is also a change in rate for business asset disposal relief (BADR) that came into effect from April 2025. Should you wish to sell your vehicle out of personal ownership the gain will now be charged at 14%, up from 10%, on the first £1m of qualifying gains. This increases further to 18% in April 2026. The rate after the first £1m has also increased from 20% to 24% from April 2025, there are no changes to this rate for 2026/27. The above analysis assumes that you have not already used any or all of your £1m BADR allowance.
The tax relief on VCTs is reducing from 30% to 20% from 6 April 2025. The maximum amount of VCT subscriptions upon which upfront income tax relief may be claimed remains at £200k per tax year, provided that shares are held for at least five years. Dividends paid by VCTs continue to be tax-free and do not require declaration on your personal tax return. VCTs continue to be free from capital gains tax (CGT).
Making Tax Digital (MTD) for Income Tax Self-Assessment comes in from 6 April 2026, where qualifying income is greater than £50k. Currently MTD does not apply to partnerships, however the government plans to include them in the future. Qualifying income is the combined gross income from self-employment and property before expenses. The qualifying income threshold reduces to £30k from 6 April 2027 and then to £20k from 6 April 2028. Please note that Lloyd’s is exempt from MTD.
For the tax years ended 5 April 2023 onwards, the loss carry-back rules have reverted back to only being able to carry back losses one year. These loss claims are still subject to the general loss cap rules for income tax purposes, which we would be happy to discuss with you if required. These rules apply to both loss claims and interest relief deductions, and to all business types.
The information in this update has been provided to us by Duncan & Toplis. Should you require any advice relating to tax, please contact us.
