Lloyd’s is still attractive from a tax perspective, but takes a budget hit

Christopher Bradford of Duncan & Toplis commented on the potential impact of yesterday’s Budget on Lloyd’s members.

“Under existing rules Lloyd’s underwriting qualifies for business property relief, which has historically made the IHT bill on Lloyd’s Underwriting £nil. The 30 October 2024 budget proposes changes to that, whilst still lower than the 40% rate attracted for listed investments or property investments, inheritance tax will now be charged at 20% above an individual’s first £1m of BPR assets. The IHT changes come into effect from April 2026.

Another impact on inheritance tax is from April 2027 pensions will start to be included in the individual’s estate taking that pot from a tax rate of 0% to 40%.

There is also a change in rate for business asset disposal relief coming 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%.

 Lloyd’s underwriting does remain an attractive business proposition with valuable tax reliefs compared to investing in listed investments and property.

As ever participation should be considered as a part of your wider activities and should you wish to consider your IHT position then please speak to your accountant.”