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Syndicate Management
Investing at Lloyd's
tax-corporate-services
News
About Us
Syndicate Management
Investing at Lloyd's
tax-corporate-services
News
On 30 October 2024, the new Labour government presented its first Budget, which introduced major tax reforms for UK citizens and non-domiciled individuals, or “non-doms.” The Chancellor outlined significant changes to inheritance tax (IHT) relief and non-dom taxation, removing long-standing exemptions and introducing new limits, including a Foreign Income and Gains (FIG) regime.
Against this backdrop, anticipation mounts as the Chancellor prepares for the next budget on the 26th of November. The investment and wealth management community is closely watching for further tax changes, while individuals and families are preparing to adjust their estate planning, reinforcing the dynamic nature of the current environment.
We understand these changes may affect your planning, and as a part of your trusted advisory team, we are here to help you navigate the updates with confidence.
The 2024 announcement brought major changes to IHT policy. Key reliefs, such as Business Property Relief and Agricultural Property Relief, were restricted or redefined, and the 100% IHT threshold was capped at £1 million. Currently, trading businesses are eligible for 100% Business Property Relief; the new rules impose a 20% tax rate on a Lloyd’s portfolio outside the exempt £1m, which remains a strong option for estate planning.
These changes will take effect in April 2026, and many individuals have spent the past 12 months considering ways to reduce potential IHT exposure. There is talk that the Chancellor may also introduce a lifetime gifting limit in the Budget next week, and that she may extend the current ‘seven-year rule’ (which keeps gifts tax-free if the transferor lives more than seven years) to ten years or more. Other changes may include the extension or removal of any taper relief previously available under the gifting policy.
These changes could mean greater exposure to IHT on estates and increased restrictions when navigating exempt gift transfers. In response, individuals have adopted a range of strategies, including early gifting, share transfers, or simply opting to “wait it out.”
At the last Budget, the government increased the main CGT rates, which were effective from April 2025, with further increases pending for 2026. The Chancellor may be considering further increases, such as aligning rates with the marginal rate of Income Tax, though it is unclear whether this would raise sufficient revenue to warrant it as an effective lever.
There is also speculation surrounding revised tax treatment for Limited Liability Partnerships (LLPs). Currently, LLP members are classified as self-employed, which exempts them from employer national insurance contributions (NICs). Potential changes could mean the introduction of employers’ NI on LLP profits.
Proposed changes could affect the use of LLP structures for wealth planning, including those underwriting at Lloyd’s through an LLP. Notably, Lloyd’s investment vehicles offer structural flexibility, and current LLP members will have the option to convert their underwriting to a limited liability company should legislative changes come into effect, and they wish to do so.
Lloyd’s of London stands out as an alternative asset class with distinct tax advantages. These may become more valuable as the Treasury continues its parade to boost inheritance tax (IHT) receipts, which are already at record highs.
Concerns around intergenerational planning are increasing in the wealth management sector, and many advisors are seeking tax efficient avenues for their clients.
Even more, a Lloyd’s portfolio typically suits a long-term horizon of more than five years.This can create a tax-efficient asset that transitions smoothly across generations, an important point for succession planning under changing tax regimes.
As the UK tax landscape changes, individuals, especially those with international connections, are reassessing their strategies. Lloyd’s of London remains a tax-efficient option for investment returns and succession planning in a complex environment.
While the full implications of the 2025 Budget will emerge in time, it is clear that ongoing changes to inheritance tax and LLPs require careful review of wealth and estate planning strategies. Investors and families should monitor further guidance and consider seeking independent professional advice to ensure their affairs remain compliant and tax-efficient under the evolving UK tax regime.
Our tax and corporate services team are dedicated to simplifying the day-to-day administration of a Lloyd’s investment through high-quality client service and advice. The team offers specialist Lloyd’s market services spanning tax, accounting, and company secretarial expertise.