What do you do if beneficiaries do not engage?
In the recent High Court decision in Nicola Anne Lowe v Lucy Daniells [2025] EWHC 3297, the Court provided some useful guidance for personal representatives facing uncooperative beneficiaries.
A solicitor sought the Court's help after unsuccessfully attempting to engage with the residuary beneficiary entitled to approximately £185k under her grandmother's will. The solicitor attempted to communicate with the beneficiary for several years following the deceased's death, but she consistently refused to cooperate, denied the existence of any entitlement and declined to renounce it.
The central question for the Court was whether the beneficiary's conduct amounted to a disclaimer of her interest. If the gift was disclaimed, the solicitor could distribute the residue to the substitute beneficiaries.
The Court was reluctant to decide whether the gift had been disclaimed, as the legal test it had to consider was unclear and the substitute beneficiaries were not parties to the proceedings. The judge identified two options:
- allow the funds to be paid into court, leaving the substitute beneficiaries to apply for payment out later; or
- make an order protecting the solicitor from liability for breach of duty and allow her to distribute the trust property to the substitute beneficiaries as though the gift had been disclaimed.
The Court preferred the second option, adopting a pragmatic approach to an unusual situation.
When can you remove a trustee?
Trustees may be removed from a trust either by the exercise of powers expressly conferred in the trust instrument, provisions set out in legislation, or by an application to the court. Express powers of removal are rare and are strictly construed. If a trustee wishes to remain in office and this is contentious, the court can be asked to remove the trustee. The court will consider whether removal is in the best interests of the beneficiaries and the administration of the trust rather than engaging in a detailed fault-finding mission.
The recent High Court case of Smith v Campbell [2025] EWHC 301, emphasised that the court's power to remove a trustee is not dependent on making findings of wrongdoing and that a "good arguable case" of some misconduct may be sufficient to establish an adverse impact on the trust and justify trustee removal. In this case, the judge found that a breakdown in relationship between the trustees and the beneficiaries gave "reasonable concern" for the fair and impartial administration of the trust, and the trustees were removed.
What does the 2025 Autumn Budget mean for your personal finances?
The Autumn Budget introduced a number of subtle, but important, reforms that need to be carefully considered by individuals when planning their finances. A summary of the key changes is discussed below.
Income tax and National Insurance Contributions (NICs)
The government is maintaining the income tax personal allowance at £12,570 and freezing income tax thresholds for an additional three years, until April 2031. National Insurance thresholds are being frozen for an additional three years, until 2031. This means that as income increases with inflation (but the thresholds remain the same), individuals may find themselves paying a higher proportion of income tax over time - even without any change in tax rates.
The Budget also introduced changes that affect how NICs interact with pension saving. The amount of NIC savings through salary sacrifice pension contributions will be capped at £2k per year, from April 2029. Salary sacrifice has been a popular way to reduce NICs while saving for retirement. Capping the amount that benefits from NIC relief is likely to reduce the attractiveness of this strategy for higher earners.
Higher taxes on savings, dividends and property income
Although the headline income tax rates and bands have not changed, the tax individuals pay on certain types of income has increased:
- tax on dividend income will increase by 2%. The ordinary rate will rise from 8.75% to 10.75%, and the upper rate from 33.75% to 35.75%, from April 2026. The additional rate will remain unchanged at 39.35%
- tax on savings and property income (for landlords and others receiving rental income) will increase by 2% across all bands. The basic rate will rise from 20% to 22%, the higher rate from 40% to 42%, and the additional rate from 45% to 47%, from April 2027.
Those with investment portfolios or rental properties will face higher tax bills on these income streams. This change particularly affects individuals who are reliant on income from investments and/or property.
Cash ISA allowance
The cash ISA allowance will reduce to £12k a year from 6 April 2027, for those aged 65 and under, down from £20k. It will still be possible to invest £20k per year in ISAs, but the remaining £8k must be invested in stocks and shares, innovative finance and/or a lifetime ISA. The maximum that can be invested annually in a lifetime ISA, remains at £4k per year.
Capital Gains Tax (CGT) and asset taxes
While the major CGT rate increases largely pre-date this Budget, individuals should be aware that:
- CGT rates on gains from the disposal of many assets are significantly higher than they were a few years ago
- the 100% relief that was previously available on qualifying disposals of shares to the trustees of an Employee Ownership Trust has been reduced to 50%, effective from Budget Day (26 November 2025)
- planned reforms to some reliefs will take effect this year. For Business Asset Disposal Relief or Investors' Relief, the rate of CGT that applies will increase from 14% to 18%, with effect from 6 April 2026.
If individuals are planning to dispose of investments, second homes, or other chargeable assets, the timing of any disposal and tax planning considerations will be an important consideration.
Property and wealth-related measures
A high-value council tax surcharge (commonly described as a 'mansion tax') will apply to homes worth £2m and over, from April 2028. The surcharge ranges from £2.5k to £7.5k per year, depending on the value of the property.
Inheritance tax (IHT)
The Budget confirmed a number of important IHT changes, particularly affecting business and agricultural assets, trusts and pensions.
- Following a further announcement on 23 December 2025, the government has stated that the level of the Agricultural and Business Property Reliefs threshold will be increased from £1m to £2.5m, when it is introduced in April 2026. This will allow spouses or civil partners to pass on up to £5m in qualifying agricultural or business assets between them before paying inheritance tax, on top of existing allowances.
- From 6 April 2026, UK agricultural property owned through non-UK entities will be treated as UK-situated for IHT purposes. This will increase IHT exposure for some non-UK residents and trusts that currently fall outside the UK IHT net.
- A new £5m cap will apply on certain 'excluded property' trusts that were set up before 30 October 2024.
- IHT charges will arise where certain trusts move from holding UK assets to holding non-UK assets.
- The government continues to prepare for the extension of IHT to certain pension funds, from 6 April 2027. As a transitional measure, personal representatives will be able to ask pension providers to withhold 50% of taxable pension benefits for up to 15 months to help cover any IHT due. In addition, personal representatives will not be liable for IHT on pension assets discovered after they have received clearance from HMRC, offering greater certainty during estate administration.
HMRC
Amongst a range of measures designed to close the 'tax gap' and strengthen HMRC's powers, it was announced in the Budget that:
- HMRC's compliance teams will be bolstered with the setup of a new dedicated small business evasion and enforcement team. HMRC intend to deploy 350 criminal investigators to carry out more targeted criminal investigations aimed at tackling the most serious fraud and tax evasion
- the government will increase, with effect from Budget Day, the rewards payable to informants who provide HMRC with high-value information. For cases where tax over £1.5m is recovered, HMRC will pay rewards of up to 30% of the additional tax collected that would have otherwise remain unpaid
- the government will invest £64m over the next five years in HMRC’s existing partnerships with private sector debt collection agencies, to collect £89m over the next five years
- the UK intends to participate in a new international exchange agreement aimed to tackle tax evasion, by providing for the automatic exchange of readily available information on real estate from 2029/30.
What this means
Overall, the Autumn Budget 2025 reinforces the government's strategy to raise more revenue through threshold freezes and targeted tax rate increases, rather than broad increases to headline tax rates. The government also intends to increase the amount of tax levied on investments and wealth more generally, particularly for landlords, high-value property owners and investors.
For many private individuals, especially those with savings, dividends, property income, or growing earnings, planning for the future will be key. Tax-efficient financial planning, including the timing of disposals, reviewing pension contributions and considering investment structures, will become increasingly important in order to manage future potential tax liabilities.
We can also expect there to be an increase in tax enquiries and investigations following the government's plans to provide further resources to HMRC's compliance teams to tackle non-compliance and to narrow the tax gap.