London (Firms): A Private Wealth Law Overview

The UK private client sector continues to evolve at a pace, shaped by the compounding effects of landmark legislative reform, shifting global wealth patterns, and an ever-changing economic and political backdrop. A year on from some of the most significant changes to UK private client taxation in a generation, the dust is beginning to settle, although the advisory work is far from done. If anything, the complexity has deepened, with further reforms already legislated and yet more on the horizon.

FIG Regime: From Anticipation to Reality

The Foreign Income and Gains (FIG) regime has now been operational for over a year, following the abolition of the “non-dom” regime with effect from 6 April 2025. The initial uncertainty has largely dissipated, although the consequences of the reform remain apparent.

The results have been nuanced. While some HNW individuals did leave the UK, the anticipated mass exodus has not materialised at the scale initially feared. The UK’s “nine-year window” (charging no UK tax on foreign income and gains for qualifying individuals in the first four years of UK tax residence and inheritance tax only on UK assets for the first nine years) has proven to be a competitive draw. New arrivals, particularly from Continental Europe, the Middle East, and increasingly the United States, are actively considering the UK as a base, drawn by world-class education, cultural depth, and the rule of law, in addition to the favourable tax regime.

For those already in the UK who restructured their affairs ahead of the April 2025 changes, the focus has now shifted to ongoing compliance, monitoring transitional reliefs as they expire, and managing the ten-year inheritance tax clock. For those who left, enquiries about returning on advantageous terms under the FIG regime continue to flow. The mobility of internationally wealthy families remains a defining feature of the market.

APR and BPR: The Challenge of 2026

The changes to agricultural property relief (APR) and business property relief (BPR) took effect from 6 April 2026. These reforms cap the 100% inheritance tax relief on qualifying agricultural and business assets at a combined GBP2.5 million per individual. Above that threshold, the effective rate of inheritance tax is 20% on the market value of qualifying assets, representing a significant shift for families whose wealth is concentrated in farms, rural estates, or privately owned trading businesses.

The challenge is acute for farming families, where assets are often illiquid, land values have increased substantially in recent years, and the ability to fund an inheritance tax liability on death can be limited. For business owners, the interaction of the new cap with existing succession planning structures and trust arrangements requires careful consideration.

The legislation is still relatively fresh and a number of practical questions remain to be resolved as HMRC guidance develops. Advisers and their clients must plan carefully, keeping arrangements under review as the position becomes more settled.

Pensions: The Next Frontier

Looking ahead, the announced inclusion of unused pension funds within the scope of inheritance tax from April 2027 represents the next significant planning challenge on the horizon. Pensions have long been one of the most effective vehicles for passing wealth to the next generation in a tax-efficient manner, and the proposed changes will fundamentally alter planning strategies for many individuals.

Clients will need to review existing pension arrangements and consider whether a pension pot remains the most efficient asset to hold, or whether other vehicles better serve their succession objectives.

The Mansion Tax: A New Charge on High-Value Property

Adding to the evolving landscape of property-related taxation, the High Value Council Tax Surcharge (HVCTS), widely referred to as the “mansion tax”, represents another significant development for private clients with high-value residential property in England. The HVCTS will apply from April 2028 as an annual surcharge on top of existing council tax, charged to the owner rather than the occupier, on all residential properties valued at GBP2 million or more based on 2026 market values.

The detail of reliefs and exemptions, and the treatment of properties held through trusts, companies and other structures remains subject to ongoing consultation, and advisers will need to monitor developments closely as the final shape of the regime becomes clear.

Political Uncertainty and the Opportunity Ahead

With Andy Burnham taking office in July 2026, the UK’s recent change of prime ministerial leadership adds a further layer of uncertainty to an already complex advisory environment. The UK has now seen seven prime ministers in a decade, and the pace of political change remains a consideration for internationally mobile clients and businesses weighing the UK against competing jurisdictions.

As this overview goes to publication, the new government’s direction of travel on tax policy is still taking shape, and it would be premature to draw firm conclusions. The full implications for private clients should become clearer in the Autumn Budget once the new chancellor has had the opportunity to set out the government’s fiscal position in detail. That said, some early signals are worth noting.

Burnham’s appointment and historic comments on the taxation of wealth have prompted speculation, not yet confirmed by firm policy commitments, about potential changes to capital gains tax rates and broader property taxation. He has declined to rule out a future wealth tax, although he has stopped well short of committing to one, and has signalled that his immediate priority is to assess the public finances carefully before announcing major fiscal changes. For now, Labour’s 2024 manifesto commitments not to raise the main rates of income tax, national insurance or VAT are said to remain in place.

International Considerations and Cross-Border Complexity

London and the UK more broadly remain a hub for internationally mobile families, and the cross-border dimension of private client work continues to grow in complexity.

The enduring strength of the US–UK relationship, combined with the deep cultural and legal ties between the two jurisdictions, continue to drive a strong flow of American clients looking to invest in the UK or establish a presence here. This interest shows no sign of abating, and advisers with dual US–UK tax capability remain strongly in demand.

Opportunities and Challenges Ahead

In summary, the UK private client sector remains in a period of significant and, in many respects, accelerating transformation. The reforms of recent years have reshaped the planning environment fundamentally, and the pipeline of further change means that the pace is unlikely to slow. Clients and their wealth are more mobile than ever, and the competition between jurisdictions for internationally mobile individuals and their advisers is intensifying.

Despite the complexity, and the challenges that recent reforms have created, the UK retains its standing as a leading jurisdiction for private client advice. Its legal framework, court system, and depth of professional expertise are without peer. For those navigating the changed landscape, the premium placed on clear, considered and holistic advisory relationships has never been higher.