Budget’s new Founders’ Relief is a welcome step, but detail is vital as BADR is scaled back and property taxes rise, says Phineas Hirsch, Partner, Private Client, at Payne Hicks Beach.
“Advisers have long called for the Treasury to approach retaining taxpayers and raising revenue as part of the same task. Against a backdrop of increasing numbers of wealthy individuals leaving the UK, it is a huge relief that the Chancellor avoided destructive measures like a wealth tax or exit tax that would have accelerated that capital exodus.
“Today’s introduction of a new ‘Founders’ Relief’ – offering a 10% CGT rate on lifetime gains up to £10 million for founders – is a very positive move to support entrepreneurs. However, we will need to see the detail of how it works and what the qualifying criteria are, especially as the threshold for Business Asset Disposal Relief (BADR) is halved to £500,000, potentially rendering it largely ineffective.
“Similarly, while protections for genuine commercial transactions and family succession are welcome regarding share buybacks, clients will need to see the fine print before taking full assurance. Meanwhile, further hikes to property and savings income tax from 2027 risk denting the UK property market further. So the overall package still requires careful navigation to ensure entrepreneurs stay, build, and invest their capital here.
“It is also worth noting that the Government has published its response to the consultation on taxation of members of LLCs which proposes to introduce an income tax charge on distributions to individual LLC members/shareholders. The positive news here is that credit will be available for eligible foreign taxes paid by them personally on the LLC’s profits, income and gains. Further consultation has been announced on the detail and application of these rules.”
Budget 2026: How could it affect your wealth? – Spear’s
Budget 2026: property income tax rise risks widening ‘phantom profit’ trap – FTAdviser
Budget 2026 offers reforms for growth – Solicitors Journal
UK BUDGET PREVIEW: Little Relief In Sight For HNW Clients – Wealth Briefing
For further information, please contact Phineas Hirsch. Alternatively, telephone 020 7465 4300.
