web development slot pragmatic can be a sought-after skill, which can open the door to many opportunities for earning money. However, being a web developer can be stressful and demanding particularly when you are required to meet deadlines, complex projects, and demanding clients. If you’re trying to diversify your sources of income and decrease your dependence on active income, you might think about pursuing passive income.

Top Passive Income Ideas for Web Developers

Passive income can be a great way for web developers to generate additional revenue streams without constant active effort.

Start a SAAS Product Developer Business

A SaaS solution could be an ideal method for Web developers to earn regular income. It is possible to build a large customer base and earn a steady revenue from membership fees by creating a solution that addresses the same issue that is common to other companies. After your product has been developed and launched, it will continue to earn money without needing an ongoing effort and allow you to focus on other business tasks.

Start an Affiliate Marketing

You can earn money by making use of affiliate marketing to promote the services or products of other individuals. Each time a purchase is made using your affiliate link, you’ll earn a commission. Your expertise can be utilized as a web designer to create content that draws people to your site and promotes the products that you’re associated with. When your content is finished you can then be able to generate passive income.

Also read: Top 15 Unique Website Ideas

Start an Online Jewelry Store

It is possible to sell your items to a huge client base and earn income from passive sources by setting up an online jewelry store. An appealing and user-friendly online store that showcases your items can be built with your skills as a web designer. After your store is set up, it can continue running and earning revenue without requiring an endless amount of work.

Start a Content Writing Company

As a web developer, starting a content writing business could be an excellent option to earn a passive income. It is possible to delegate work and focus on business growth while also earning a share of the profits by hiring additional editors and writers. If your team is on the job the business will continue to earn money with no direct involvement, which gives you the opportunity to move to other tasks.

Start a Subscription Box Business

Customers who subscribe to receive a particular set of products every month from a subscription-box business. Because customers love getting a variety of items from different brands Subscription boxes are in fashion in the present.

Sell Digital Products

Digital assets, such as stock images and 3D models are developed and sold by web developers. Digital assets are easy to use and could generate earnings for many years. The most highly rated items are those that can be made digital. They are easy to create and share and are a great way to increase your business.

Start a Tech Blog

Blogging has become an income-generating venture for those with the appropriate expertise and who are able to effectively communicate with their readers. Through sharing useful information bloggers are able to earn money through a variety of ways, including affiliate marketing sponsorships or Google Ads.

Start A WordPress Template Business

Web developers are able to design templates for their websites and sell them on marketplaces for digital goods like ThemeForest. After a template has been created it can be used to continue earning revenue without any additional effort from the designer.

Also read: Top 30 Money Making Apps for Extra Income

Start A Website Hosting Platform

Web developers are able to offer website hosting services to their customers or offer hosting packages for sale on websites. Hosting could be a lucrative passive income stream because customers regularly pay to host services.

Start an Etsy shop

Etsy is a popular platform for artists to sell their products and web designers are able to profit from this opportunity by creating a visually appealing and user-friendly shop. After you’ve established your shop, you’ll be able to create multiple passive income streams by implementing actions like refining the product listing, using social media to promote the shop, and collaborating with influencers to enhance its visibility.

Final Word

Web developers can generate passive income through digital products, affiliate marketing, ad revenue, mobile apps, online courses, and more. Diversifying income streams can lead to financial stability and growth.

Understanding the Tax Differences

If you’re preparing to sell your business, you’ll probably spend plenty of time discussing the purchase price, the completion date and the finer details of the deal. What often comes as a surprise is that how*the sale is structured can be just as important as how much you’re selling the business for.

One of the first questions that usually needs answering is whether the transaction will be a share sale or an asset sale.

While the difference may sound technical, it can have a significant impact on both the tax position and the commercial outcome for everyone involved. Understanding the distinction early on can help avoid unexpected surprises and ensure you’re in the strongest possible position before negotiations begin.

What Is a Share Sale?

In a share sale, the buyer acquires the shares in the company rather than the individual assets it owns.

From the seller’s perspective, this often provides a cleaner exit. Ownership of the company transfers to the buyer, along with its assets, liabilities, contracts and trading history, while you simply dispose of your shares.

For many owner-managed businesses, this is generally the preferred outcome because it can be more straightforward from a tax perspective and may allow the seller to benefit from Capital Gains Tax treatment, depending on their individual circumstances.

That said, buyers are effectively inheriting the company’s history. Understandably, they’ll want reassurance that there aren’t any unexpected tax liabilities or compliance issues waiting to emerge after completion. This is why tax due diligence plays such an important role in a share sale.

What Is an Asset Sale?

An asset sale works differently.

Rather than purchasing the company itself, the buyer selects the assets they want to acquire. This might include property, equipment, stock, intellectual property, customer contracts or goodwill, while the company itself remains with the seller.

From a buyer’s perspective, this can be an attractive option because it allows them to leave behind liabilities they don’t wish to inherit.

For the seller, however, the position can be more complicated. The company may first pay tax on the profit arising from the sale of its assets and, if the remaining proceeds are later extracted by the shareholders, there may be a further layer of tax to consider.

While this won’t always be the case, it does mean an asset sale can produce a very different overall tax outcome compared with a share sale.

Why Do Buyers and Sellers Often Want Different Things?

It’s not uncommon for buyers and sellers to have different preferences when it comes to the structure of a transaction.

A seller will often favour a share sale because it can provide a cleaner exit and may offer a more favourable tax outcome. A buyer, on the other hand, may prefer an asset sale as it can reduce the risk of inheriting historic liabilities and provide greater flexibility over exactly what they’re acquiring.

Neither approach is inherently right or wrong. The final structure is usually the result of commercial negotiations, tax considerations and the practical objectives of both parties.

It’s Not Just About Tax

While tax is undoubtedly an important consideration, it shouldn’t be the only factor influencing how a transaction is structured.

The legal position, financing arrangements, existing contracts, employee transfers, regulatory requirements and commercial objectives all need to be taken into account.

In many cases, achieving the best overall outcome involves balancing tax efficiency with commercial reality. A structure that looks attractive from a tax perspective may not always be practical, while the commercially preferred option may come with a different tax cost. The key is understanding those implications before heads of terms are agreed, not after.

Why Planning Ahead Makes a Difference

By the time a buyer has made an offer, both parties often have a preferred deal structure in mind.

If you only begin considering the tax consequences at that stage, your ability to influence the outcome may be limited. Seeking advice early allows you to understand the likely tax implications of different structures, identify potential issues before negotiations begin and approach discussions with confidence.

It also means you’re less likely to be caught off guard if a buyer proposes a structure that differs from your expectations.

The Bottom Line

There isn’t a one-size-fits-all answer when it comes to choosing between a share sale and an asset sale.

Every business, every buyer and every transaction is different. What matters is understanding the tax and commercial implications of each option before key decisions are made, rather than trying to deal with them once negotiations are well underway.

With the right planning and advice, you’ll be in a much stronger position to negotiate confidently, protect the value of your business and achieve an outcome that works for everyone involved.

Thinking About Selling Your Business?

If you’re considering selling your business, it’s never too early to start planning. Our tax specialists can help you understand the tax implications of different deal structures, identify planning opportunities and support you throughout the transaction process.

Get in touch with our team today to discuss your plans and find out how we can help you achieve a successful and tax-efficient business sale.

My Client is Returning to the UK After 12 Years Abroad – What Should We Do Before They Arrive?

Scenario

An accountant contacted ETC after hearing from a former client who was planning to return permanently to the UK after 12 years living and working overseas.

The client had originally left the UK for employment purposes but, during their time abroad, had built up a significant portfolio of overseas assets.

These included:

• an overseas investment portfolio worth approximately £1.2 million;
• cash deposits of approximately £300,000, generating around £12,000 a year in interest;
• an overseas rental property worth approximately £650,000, generating gross rents of around £30,000 a year; and
• shares in an overseas company which had increased significantly in value since acquisition.

The investment portfolio was also generating approximately £35,000 a year in dividends and other investment income.

In total, the client potentially had more than £75,000 of annual foreign income, as well as substantial unrealised gains within their overseas investments.

The client planned to return to the UK permanently during the 2026/27 tax year.

They approached their former accountant and asked what initially sounded like a relatively straightforward question:

“Is there anything I need to do about my overseas investments when I move back?”

The accountant recognised that the answer could have significant tax implications and contacted ETC before advising the client.

Issue

The first question was whether the client would become UK resident immediately on their return and whether split-year treatment could apply.

However, residence was only part of the picture.

Since 6 April 2025, the taxation of foreign income and gains for qualifying new UK residents has changed significantly.

The accountant therefore needed to establish whether the client could qualify for the four-year Foreign Income and Gains (FIG) regime.

Broadly, eligibility required looking at whether the individual had been non-UK resident for the necessary period before becoming UK resident.

With the client having spent 12 years overseas, there was potentially an opportunity to benefit from the FIG regime following their return.

But there were several further questions.

Would the client’s overseas rental profits fall within the regime?

What about the £35,000 of annual overseas investment income?

How would future gains on the £1.2 million investment portfolio be treated?

Would selling overseas investments before returning produce a different result from selling them afterwards?

And importantly, when exactly would the client’s four-year FIG window begin and end?

The accountant wanted to give the client a clear plan before they returned to the UK, rather than waiting until the first UK Self Assessment return was due.

How ETC Helped

ETC worked alongside the accountant to review the client’s residence history and overseas assets.

Step 1 – Reconstructing the Residence Position

We first reviewed the client’s UK residence position for the years before their return.

Rather than relying simply on the statement that the client had “lived abroad for 12 years”, we considered their circumstances under the relevant residence rules.

This included their time spent in the UK, accommodation, work patterns and other relevant connections.

This was important because FIG eligibility depends on the individual’s UK tax residence history, not simply where they regarded themselves as living.

Having established the residence history, we could consider whether the client met the conditions for the four-year FIG regime.

Step 2 – Establishing the Return Date

We then considered the client’s proposed return during 2026/27.

The accountant initially expected the client simply to become UK resident for the whole tax year.

However, we considered whether the circumstances could satisfy one of the statutory split-year cases.

Where split-year treatment applies, the tax year is divided into a UK and overseas part for certain purposes.

This allowed the accountant and client to understand precisely when the UK tax position would change.

It was also important to establish that a split year can still count as a year of UK residence for the four-year FIG period.

The client therefore couldn’t assume that a partial first year in the UK would give them four additional complete tax years of FIG treatment.

Step 3 – Reviewing the £2 Million+ Overseas Asset Portfolio

We then reviewed the client’s overseas assets individually rather than treating everything held abroad in the same way.

The portfolio included approximately:

£1.2 million – investments

£650,000 – overseas property

£300,000 – cash

This gave the client overseas assets worth approximately £2.15 million.

We considered the nature of the income and potential gains arising from each asset and how these could be treated once the client became a UK resident.

This was particularly important because the client was expecting approximately:

£35,000 – investment income

£30,000 – gross overseas rents

£12,000 – overseas interest

That represented around £77,000 of gross foreign income each year before considering any investment disposals or capital gains.

Step 4 – Looking at Unrealised Gains

One of the most important areas was the client’s investment portfolio.

Several investments had been acquired many years earlier and had increased substantially in value.

For example, one overseas shareholding had originally cost approximately £150,000 but was now worth around £400,000.

That represented an unrealised gain of approximately £250,000.

The client had been considering selling the shares but hadn’t decided whether to do so before or after returning to the UK.

ETC helped the accountant understand how the timing of disposals could interact with the client’s UK residence and potential FIG position.

Rather than making investment decisions purely on commercial grounds without considering UK tax, the client could now factor the tax consequences into their decision-making.

Step 5 – Creating a Four-Year Tax Roadmap

Having established that the client could potentially qualify for the FIG regime, we helped the accountant map out the client’s first four UK-resident tax years.

The purpose wasn’t simply to minimise the client’s tax in year one.

We wanted the accountant and client to understand what happened throughout the entire FIG period and, importantly, what would happen when it ended.

With more than £2 million of overseas assets, planning for year five could be just as important as planning for year one.

The roadmap therefore considered the expected foreign income, potential investment disposals and the future treatment of the overseas property.

This gave the accountant a framework they could use when advising the client each year.

Outcome

Instead of returning to the UK and addressing the tax consequences afterwards, the client had a clearer picture of their position before the move took place.

The accountant understood:

• when the client was expected to become UK resident;
• whether split-year treatment could apply;
• whether the client could qualify for the four-year FIG regime;
• when that four-year period would start and finish;
• how the client’s different sources of foreign income and gains needed to be considered;
• which transactions might warrant consideration before or during the FIG period; and
• what would change once the four-year FIG period came to an end.

The client could therefore make decisions about their £2.15 million overseas portfolio with a better understanding of the potential UK tax consequences.

Client Benefit

The client had spent more than a decade building wealth overseas and was returning to the UK with substantially more complex affairs than when they left.

What could easily have become a tax compliance exercise after their return instead became a pre-arrival tax planning exercise.

By taking advice before moving, the client had time to consider the timing of investment disposals, understand the treatment of their foreign income and plan for the transition into the UK tax system.

For the accountant, the case demonstrated that they didn’t need to refer away a long-standing client simply because their affairs had become internationally complex.

They retained the overall client relationship and continued to deal with the client’s ongoing accounts and tax compliance.

ETC was brought in specifically to provide the specialist UK tax residency advice needed to support them.

The accountant therefore had access to specialist expertise when they needed it, while remaining the client’s primary adviser.

Next Steps

Do you have a client returning to the UK after several years overseas?

The earlier their residence, foreign income and overseas assets are considered, the more opportunity there may be to plan before their UK tax position changes. Get in touch with ETC Tax.

Planning to Sell Your Business?

If you’re planning to sell your business, one of the first questions you’re likely to ask is, “How much tax will I have to pay?”

The answer will depend on a number of factors, but one relief that often comes into the conversation is Business Asset Disposal Relief (BADR). If you qualify, it can reduce the rate of Capital Gains Tax you pay on the sale of your business, potentially resulting in a significant tax saving.

However, despite its name, Business Asset Disposal Relief isn’t something that automatically applies simply because you’re selling a business. There are several conditions that need to be met, and it’s not uncommon for business owners to assume they qualify when, in reality, one or more of those conditions hasn’t been satisfied.

That’s why it’s so important to understand how the relief works before you agree a sale.

What is Business Asset Disposal Relief?

Business Asset Disposal Relief is a Capital Gains Tax relief designed to support business owners when they dispose of all or part of their business.

In simple terms, if you qualify, the gain arising on the sale may be taxed at a lower rate than would otherwise apply, subject to the relevant lifetime limit.

For many owners, this can make a considerable difference to the amount they ultimately receive from the sale, which is why confirming your eligibility should form part of your exit planning.

Who Can Qualify?

Business Asset Disposal Relief isn’t limited to one type of business owner.

Depending on your circumstances, it may be available to:

• Sole traders selling their business.
• Individuals disposing of an interest in a partnership.
• Shareholders selling shares in their personal company.

The qualifying conditions differ depending on the type of disposal, but one thing remains consistent; the relief is based on meeting specific criteria, not simply owning a business.

Understanding the Qualifying Conditions

While every situation is different, there are a number of key conditions that commonly need to be satisfied.

For example, where shares in a company are being sold, you will generally need to have held the shares for a minimum qualifying period, the company will usually need to be carrying on a trading activity rather than primarily holding investments, and you will normally need to have been an officer or employee of the company during the relevant period.

There are also minimum shareholding requirements that need to be considered.

Although these conditions may sound straightforward, the detail is often where complications arise. Small changes to ownership structures or historic transactions can sometimes affect eligibility without business owners realising.

Why It’s Worth Checking Early

One of the biggest misconceptions is that Business Asset Disposal Relief is something you look at once you’ve found a buyer.

In reality, that’s often too late.

Many of the conditions need to be satisfied for a qualifying period before the sale takes place, meaning opportunities to improve your position may no longer be available once negotiations have started.

Reviewing your eligibility well in advance gives you time to understand your position and, where appropriate, consider whether any planning can be undertaken before a transaction begins.

Common Reasons Business Owners Miss Out

Every business is different, but there are several situations we regularly see where business owners are surprised to discover they don’t qualify for relief.

This might be because ownership has changed over the years, the company no longer meets the definition of a trading company, shareholdings have been diluted following investment, or a previous reorganisation has unintentionally affected the qualifying conditions.

In other cases, owners simply assume they qualify without ever checking.

None of these situations necessarily mean relief is unavailable, but they do highlight why it’s important not to leave the review until the final stages of a transaction.

Every Sale Is Different

No two business sales are the same.

The availability of Business Asset Disposal Relief can be influenced by the structure of your business, your ownership history and the way the transaction is ultimately carried out.

That’s why it’s important to consider the relief as part of your wider exit strategy rather than viewing it in isolation.

By taking advice early, you’ll have a clearer understanding of your tax position and greater confidence that you’re making informed decisions throughout the sale process.

The Bottom Line

Business Asset Disposal Relief can provide valuable tax savings, but qualifying isn’t automatic. Understanding the conditions well before a sale allows you to identify any potential issues, explore planning opportunities where appropriate and avoid unnecessary surprises during negotiations.

If selling your business is on the horizon, don’t assume everything will fall into place. A review carried out early in the process could make a significant difference to your overall tax position and help ensure you’re able to retain more of the value you’ve worked so hard to create.

Thinking About Selling Your Business?

Whether you’re just starting to think about an exit or you’re already in discussions with a potential buyer, our tax specialists can help you understand your position and identify planning opportunities before it’s too late.

Get in touch with our team today to discuss your exit plans and find out how we can help you prepare for a successful sale.

There are specific rules dealing with earnings received during a period of absence from employment.

Section 38 ITEPA 2003 broadly provides that, where an individual ordinarily performs some or all of their employment duties in the UK, earnings relating to a period of absence are treated as relating to UK duties, except to the extent that the duties would have been performed outside the UK had the absence not occurred.

HMRC’s guidance at EIM40202 considers this specifically in the context of illness. HMRC gives an example of a non-UK resident employee who normally works in the UK one day a week and misses three UK working days due to illness. The earnings relating to those three days remain attributable to UK duties, notwithstanding that the individual did not physically work in the UK.

For your client, we therefore think the key question is where he would have been working during the period of sickness had he not been absent.

If, for example, he had already been scheduled to work in the UK during part of October to December 2025 but was unable to do so because of his illness, the sick pay attributable to those days could potentially be regarded as UK employment income.

On the other hand, if he would have been working outside the UK during that period, the corresponding sick pay should generally be treated as relating to overseas duties. If there were no scheduled assignments and he was simply on call to work in any jurisdiction, the position is less clear-cut and would need to be considered based on the particular facts and working arrangements. 

It would therefore be helpful to establish whether the employer can identify where the client was due, or expected, to work during October, November and December 2025 had he not been ill. If there were no planned assignments, we would suggest retaining evidence of this together with details of how assignments are ordinarily allocated, to support the treatment adopted.

The double tax treaty provides that employment income of a Spanish resident is generally taxable only in Spain unless the employment is exercised in the UK. Therefore, even if an element of the sick pay were regarded as relating to UK duties under the domestic legislation, the treaty position should also be considered before concluding the amount taxable in the UK.

Why Every Seller Needs One

For many business owners, selling a company is a once-in-a-lifetime event. Years of hard work have gone into building the business, and understandably, the focus is often on finding the right buyer and achieving the best possible price.

What is sometimes overlooked is that buyers are not simply purchasing a business based on its profits. They are also buying its history. That means they will want to understand whether the company has complied with its tax obligations and whether there are any hidden risks that could come back to haunt them after completion. This is where a pre-sale tax health check can make all the difference.

What is a pre-sale tax health check?

Think of it as carrying out your own due diligence before a buyer does.

Rather than waiting for a buyer’s advisers to scrutinise every aspect of your business, a tax health check allows you to review your tax affairs in advance, identify any potential issues and, where possible, resolve them before they become part of the sale process. It’s a proactive exercise rather than a reactive one.

Instead of answering difficult questions under the pressure of a live transaction, you have the time and space to deal with matters properly.

Why does it matter?

Every buyer wants certainty.

When a buyer carries out tax due diligence, they are looking for anything that could result in an unexpected tax liability after they acquire the business. If they identify concerns, there are several possible outcomes and none of them are usually good news for the seller.

They may seek a reduction in the purchase price, request additional warranties or indemnities, or simply delay the transaction while further investigations take place. In some cases, repeated issues can even cause a buyer to walk away altogether. Many of these situations could have been avoided had the issues been identified earlier.

What sort of issues are commonly found?

You might assume that a tax health check is only worthwhile if you know there are problems lurking in the background. In reality, many businesses discover issues they had no idea existed.

Some of the more common areas include:

• PAYE or benefits provided to directors that have not been reported correctly.
• VAT treatments that have evolved over time without being reviewed.
• Historic Corporation Tax positions that may not be fully supported.
• Loans to directors or shareholders that have unexpected tax consequences.
• Share issues, option schemes or company reorganisations that were not documented as intended.
• R&D claims or capital allowance claims that may require additional evidence.
• General compliance matters such as late filings or incomplete records.

None of these automatically mean a sale cannot proceed. However, discovering them yourself is almost always preferable to having a buyer uncover them first.

It’s not just about fixing mistakes

One of the biggest misconceptions is that a tax health check is simply an exercise in finding problems. In reality, it is just as much about identifying opportunities. For example, it may highlight that certain tax reliefs are available, that your ownership structure could be improved before a sale, or that there are planning opportunities which are only available if action is taken well in advance of completion. These opportunities often disappear once contracts have been exchanged, so timing is critical.

When should you carry one out?

Ideally, the answer is sooner than you think. Many business owners only start thinking about tax once a buyer has been found. By then, there may be limited scope to resolve issues or undertake any meaningful planning.

Starting 12 to 24 months before an anticipated sale provides far greater flexibility. It gives time to investigate any historic matters, implement planning where appropriate and ensure records are in good order before due diligence begins.

Of course, not every sale comes with that luxury. Even if a transaction is already underway, carrying out a review can still help you understand where any questions are likely to arise and prepare robust responses.

 A smoother transaction for everyone

Selling a business is demanding enough without unexpected tax issues appearing halfway through the process. A pre-sale tax health check won’t guarantee that a buyer won’t ask questions; they almost certainly will, but it can make those conversations far easier.

It demonstrates that the business has been well managed, provides confidence in the information being presented and reduces the likelihood of unpleasant surprises affecting negotiations. Ultimately, buyers value certainty. The more confidence they have in what they are buying, the more straightforward the transaction is likely to be.

The bottom line

 A successful business sale is about much more than agreeing a headline price. Protecting that value throughout the transaction is just as important.

A pre-sale tax health check allows you to identify risks before they become someone else’s discovery, gives you time to put matters right where necessary and ensures you enter negotiations from the strongest possible position.

Next Steps

If selling your business is on the horizon, contact us. Even if it is still a year or two away, taking the time to review your tax affairs now could be one of the most valuable steps you take before putting the business on the market.

Thinking About Selling Your Business

If you’re thinking about selling your business, it’s easy to focus on the big-ticket items. Finding the right buyer, agreeing a price and negotiating the terms of the deal will naturally be at the forefront of your mind.

However, one of the biggest mistakes business owners make is leaving tax planning until the sale is already underway. By the time a buyer has been found, opportunities to improve your tax position may have passed, and any historic issues are much more likely to become sticking points during negotiations.

The Good News…

With a little forward planning, many of these risks can be avoided. Here are some of the key areas worth considering before putting your business on the market.

Start Planning Earlier Than You Think

One of the best pieces of advice we can give is simple: don’t wait until you’ve accepted an offer.

Ideally, tax planning should begin 12 to 24 months before a proposed sale. While that may sound like a long time, certain tax reliefs and planning opportunities require action well before contracts are signed.

Starting early also gives you the breathing space to make informed decisions, rather than feeling pressured to deal with matters while a transaction is moving at pace. Even if you’re not planning to sell tomorrow, having a long-term exit strategy can put you in a much stronger position when the opportunity eventually arises.

Review Your Shareholding Structure

Who owns your business?

It sounds like a straightforward question, but the answer isn’t always as simple as it first appears. Over the years, businesses often evolve. Family members may have become shareholders, new investors may have joined, or shares may have been transferred for commercial reasons.

Before a sale, it’s important to understand exactly who owns what, how those shares were acquired and whether the current structure still achieves the outcome you’re looking for. Making changes once a sale is imminent can be difficult, and in some cases may create tax consequences of their own.

Check Whether You Qualify for Tax Reliefs

Many business owners have heard of Business Asset Disposal Relief, but fewer know whether they actually qualify.

The conditions for relief can be more detailed than expected, and it’s not uncommon for owners to assume they’ll benefit from a lower rate of Capital Gains Tax, only to discover later that one of the qualifying conditions hasn’t been met. Reviewing your eligibility well before a sale gives you time to consider whether any action can be taken before it’s too late. Even where Business Asset Disposal Relief isn’t available, there may be other planning opportunities depending on your circumstances.

Deal with Historic Tax Issues

No business is perfect. Over the years, it’s not unusual for businesses to have areas that could benefit from a second look. Perhaps a VAT treatment has never been reviewed, director benefits haven’t always been reported consistently, or an old company reorganisation wasn’t documented quite as expected. That doesn’t necessarily mean there’s a problem.

What matters is identifying these issues before a buyer does. Addressing matters proactively demonstrates good governance, provides confidence to potential buyers and often makes tax due diligence significantly smoother.

Get Your Records in Order

When buyers carry out due diligence, they’ll want evidence to support what they’re being told. Having your records organised can make a remarkable difference to the speed and efficiency of the process.

This includes ensuring statutory registers are up to date, share certificates are available, board minutes have been retained where appropriate, tax returns have been submitted, and any correspondence with HMRC is easily accessible.

Good record keeping won’t increase the value of your business overnight, but it can certainly make life much easier when questions start to be asked.

Remember That Tax Is Only One Piece of the Puzzle

While tax planning is an important part of preparing for a sale, it shouldn’t happen in isolation.

Legal agreements, shareholder arrangements, commercial contracts, intellectual property, employee incentives and financing arrangements can all influence how straightforward a transaction becomes. The earlier your professional advisers can work together, the more likely it is that potential issues can be identified and resolved before they affect the deal.

The Bottom Line

Selling a business is rarely a decision that’s made overnight, so your tax planning shouldn’t be either.

The earlier you start preparing, the more options you’ll have, the fewer surprises you’re likely to encounter and the better placed you’ll be to protect the value you’ve spent years creating. A successful exit isn’t just about finding the right buyer; it’s about making sure your business is in the best possible shape when they come knocking.

By taking the time to plan ahead, you can approach the sale process with confidence, minimise unnecessary delays and put yourself in the strongest position to achieve the best possible outcome.

Need Help Preparing for a Sale?

If you’re considering selling your business, whether that’s in the next few months or a few years’ time, our tax specialists can help you plan ahead. From pre-sale tax health checks and exit planning to transaction support, we’ll work with you to identify potential risks, maximise available tax reliefs and help you achieve the best possible outcome.

If you’d like to discuss your exit plans, get in touch with our team, we’d be happy to help.

Further Reading

Buying or selling a company web page

Think You Know What Your Business Is Worth

Do You Need a Valuation?

UK Exit Tax: Could an Exit Charge Accelerate the Flight of UK Millionaires?

The number of millionaires living in Britain has reportedly fallen by 7% since 2024, according to the Adam Smith Institute think tank, adding to the debate over whether the UK is becoming a less attractive place for wealthy individuals and entrepreneurs.

At the same time, there have been growing calls for greater taxation of wealth.  That raises an interesting question ahead of the budget: could a UK exit tax become part of the discussion?

An exit tax could, for example, seek to impose a tax charge on individuals leaving the UK by bringing unrealised gains within the scope of Capital Gains Tax (CGT) on departure.

To be clear, there is currently no general UK exit tax of this kind for individuals, and there has been no announcement that one will be introduced.  For now, this remains speculation, but with the taxation of wealth continuing to attract political and media attention, it is interesting to look at how an exit charge might work and some of the questions it could raise.

Millionaire numbers fall 7% since 2024

According to the Adam Smith Institute’s Millionaire Tracker, Britain now has around 442,000 sterling millionaires, based on its inflation-adjusted measure. The Institute says that represents a fall of around 7% since 2024 and the lowest level since the Global Financial Crisis.

That does not necessarily mean wealthy individuals are simply packing their bags and leaving the UK.

The Institute points to several possible factors behind the figures, including falling real asset prices, Britain’s relatively low household savings rate and the emigration of high-net-worth individuals.

However, reports of wealthy individuals leaving the UK have certainly attracted plenty of attention.

A number of high-profile departures have also fed into wider debate about the UK’s tax system and its international competitiveness, particularly when it comes to entrepreneurs, investors and internationally mobile individuals.

Why are wealthy individuals leaving the UK?

There is unlikely to be one simple answer.

Tax will rarely be the only factor in deciding where someone chooses to live.  Family, lifestyle, business opportunities, political stability and access to international markets can all play a part.

Tax can, of course, be one consideration, particularly for people who have the flexibility to choose between several countries. 

The UK tax landscape has also changed significantly in recent years, including the replacement of the former non-domicile regime and significant changes to the taxation of foreign income and gains.

At the same time, a number of countries have introduced tax regimes intended to attract internationally mobile wealthy individuals.

All of this feeds into a much wider policy debate around how governments raise tax revenue while also seeking to remain attractive to entrepreneurs, investors and internationally mobile individuals.

Calls for a UK wealth tax grow

Against this backdrop, there have been calls for greater taxation of wealth in the UK.

Supporters of a UK wealth tax argue that those with the greatest resources should contribute more towards public finances, particularly at a time when the Government is under pressure to raise revenue.

Critics have questioned how much such a tax might ultimately raise once issues such as behavioural changes, valuations and the possibility of individuals relocating are taken into account.

Whatever side of that debate you sit on, it raises another interesting question.

If there are concerns that some wealthy individuals could choose to leave the UK following further tax rises, could an exit charge become part of the policy discussions?

Again, there has been no announcement that such a general charge will be introduced.

Could the Government introduce a UK exit tax?

A UK exit tax, sometimes described as an exit charge, could theoretically seek to tax gains that have built up while someone has been UK resident but have not been realised before they leave.

A simplified example illustrates the concept.

Suppose an entrepreneur established a company while living in the UK. Their shares originally cost £100,000 but have since increased substantially in value.

If they still own those shares when they become non-UK resident, there has not ordinarily been a disposal simply because they left the country.

HMRC’s current Capital Gains Manual confirms that no general exit charge applies to all individuals simply because UK residence ceases.

That does not, however, mean someone automatically leaves the UK tax system behind when they move overseas.

For example, UK land can remain within the scope of CGT for non-residents, while the UK’s temporary non-residence rules can bring certain gains realised during a period abroad back into charge if the individual subsequently resumes UK residence and the relevant conditions are met.

A new general exit charge would therefore represent a significant change from the present position.

How might a UK exit charge work?

There are numerous ways in which an exit tax could theoretically be structured, and without an actual Government proposal, it is impossible to say what any UK version might look like.

Any proposal would need considerable detail around issues including valuations, liquidity, double taxation, the interaction with tax treaties and the treatment of individuals who subsequently return to the UK.

It would also raise an important practical issue for business owners.

An entrepreneur could potentially have considerable wealth tied up in a private company without having the cash available to meet a tax charge based on the company’s paper value.

These are among the reasons why the precise design of any exit tax would matter just as much as the headline rate.  The detail of any potential regime would therefore be crucial.

UK exit tax: could it have unintended consequences?

One argument that might be made for an exit charge is that it could discourage some wealthy individuals from leaving the UK, but taxation can influence behaviour before a charge takes effect.

If internationally mobile individuals believed that becoming UK resident could ultimately make it expensive to leave, some might decide not to establish UK residence in the first place.

Similarly, existing UK residents contemplating an international move could potentially accelerate their plans if they believed an exit tax was likely to be introduced.

That does not necessarily mean an exit charge would result in an exodus. Much would depend on its design, commencement provisions and how the UK’s overall tax regime compared with competing jurisdictions.  Therefore, without knowing what any hypothetical regime would look like, it is impossible to predict the behavioural impact.

It does, however, illustrate some of the questions policymakers might need to consider if an exit tax were ever put forward.

What does this mean for people considering leaving the UK?

For now, perhaps the most important point is that reports of a new general UK exit tax are just that, reports and speculation.

There is currently no general exit charge for individuals simply because they cease to be UK resident, and anyone considering an international move should be cautious about making significant decisions based solely on speculation about what might appear in the future budget.

However, leaving the UK already comes with a number of tax considerations

Becoming non-UK resident is not simply a question of moving abroad. UK tax residence is determined under the Statutory Residence Test (SRT), and the outcome will depend on an individual’s particular circumstances.

There can also be continuing UK tax implications after departure, including in relation to UK property, business interests, trusts, inheritance tax and the temporary non-residence rules.

For entrepreneurs and high-net-worth individuals in particular, an international move therefore requires careful planning.

With another Budget approaching and wealth taxation continuing to feature in political debate, this is certainly an area worth keeping an eye on.

The bigger question: what happens next?

The reported 7% fall in Britain’s millionaire population does not, on its own, tell us why the number has fallen, nor does it demonstrate that UK tax policy is responsible.

What it does do is add another dimension to the wider discussion about tax, wealth and the UK’s attractiveness to internationally mobile individuals.

Whether an exit charge ever becomes part of that discussion at Government level remains to be seen.

If it does emerge as a formal proposal, the detail will be important and so will the potential impact on individuals already living in the UK and those considering moving here in the future.

FAQ section

Is there currently a UK exit tax?

There is currently no general Capital Gains Tax exit charge applying to individuals simply because they cease to be UK resident. However, specific UK tax rules can continue to apply after departure, so individual circumstances need to be considered.

Will the UK introduce an exit tax?

There is currently no general UK exit tax announcement. Any discussion about a new exit charge should therefore be treated as speculation unless and until the Government publishes a formal proposal.

Do I pay Capital Gains Tax if I leave the UK?

Leaving the UK does not necessarily create an immediate CGT charge on all your assets.

However, UK tax can continue to apply to certain disposals, including UK land, and the temporary non-residence rules may apply where an individual returns to the UK within the relevant period.

What are the temporary non-residence rules?

Broadly, the temporary non-residence rules can bring certain income and gains realised while an individual is non-UK resident into charge when they return to the UK, provided the relevant conditions are met. The rules are detailed and depend on the individual’s circumstances.

Considering leaving the UK?

The tax consequences of becoming non-UK resident can be complex, particularly for business owners, shareholders and high-net-worth individuals with assets in multiple jurisdictions.

Next Steps

If you would like to discuss the UK tax implications of becoming non-resident, please contact ETC Tax, and we would be happy to help.

Let Property Campaign: 5 Things Landlords Should Know About Undeclared Rental Income

Did you know there is an HMRC campaign specifically for landlords who need to put their tax affairs right?

If you have received rental income that hasn’t been fully declared to HMRC, dealing with it sooner rather than later can make a significant difference.

HMRC’s Let Property Campaign (LPC) is a disclosure opportunity for individual landlords who need to bring their UK tax affairs up to date. It can be used to voluntarily disclose previously undeclared rental income from UK or overseas residential property and settle any additional tax, interest and penalties due.

The campaign can apply in a wide range of circumstances, whether you own a single rental property or a portfolio, inherited a property, became an accidental landlord, operate a holiday let, or live overseas while receiving rent from UK property.

It can also help where you have previously submitted tax returns but omitted some or all of your rental income, or where you did not realise you needed to register for Self-Assessment in the first place.

One of the biggest reasons to act voluntarily is that coming forward before HMRC identifies the problem can result in a more favourable penalty position. HMRC increasingly has access to information that can help it identify landlords and discrepancies in reported property income, so assuming undeclared income will simply go unnoticed can be risky.

If you’re concerned about historic rental income, here are five things you should know about the Let Property Campaign and making a disclosure to HMRC.

How to Disclose Rental Income to HMRC Using the Let Property Campaign

If you’ve received rental income that hasn’t been fully reported, it’s crucial to take action. Disclosing rental income is simpler than you might think when using the Let Property Campaign.

The Let Property Campaign allows landlords to come forward voluntarily, report previously unreported rental income, and reduce potential penalties. By acting proactively, you show HMRC you are cooperating, which often results in lower liabilities than if they discover the issue first.

Recent figures show why acting early matters: HMRC recovered £104m from landlords through voluntary disclosures and wider compliance activity in 2025-26, marking the third consecutive year that more than £100m has been collected from unpaid tax on property income. Since the Let Property Campaign launched in 2013, landlords have paid over £674m in unpaid tax through the scheme.

Steps to disclose rental income:

1. Collect records – rental payments, expenses, and bank statements.
2. Calculate profits – deduct allowable expenses to determine net rental income.
3. Submit through the campaign – HMRC provides a secure reporting process.
4. Agree on penalties – reduced if you are upfront and cooperative.

This is becoming increasingly important as Making Tax Digital for Income Tax expands. From 6 April 2026, landlords and sole traders with qualifying income above £50,000 are required to comply with Making Tax Digital for Income Tax, including maintaining digital records and submitting quarterly updates to HMRC. The threshold will fall to £30,000 from 6 April 2027. Further reading on Making Tax Digital click here

Don’t risk larger fines or complications. Start the process today to get your rental income in order and stay compliant.

What Happens if You Don’t Declare Rental Income in the UK?

Failing to declare rental income in the UK can lead to serious consequences. HMRC takes undeclared income seriously, and landlords who do not report rental profits may face penalties, interest charges, and HMRC investigations.

HMRC’s recent activity shows the scale of the risk. In 2025-26, landlord voluntary disclosures rose by 48% to 11,511, the highest level since 2018-19, while total tax recovered from landlords remained close to historic highs at £104.3m.

If you haven’t declared rental income, HMRC can:

• Charge penalties of up to 100% of the tax owed.
• Apply interest on unpaid tax, increasing the total amount due.
• Launch investigations that can be time-consuming and stressful.

The good news is that HMRC encourages voluntary disclosure through schemes like the Let Property Campaign. Coming forward proactively avoids more severe enforcement measures.

HMRC is also making greater use of third-party data, Land Registry information, AI and advanced analytics to identify landlords who may have undeclared rental income, meaning non-compliance is becoming harder to overlook.

Ignoring the issue can make things worse, but taking action now can put you back on the right track.

LPC Penalties in the UK: How Much Could You Really Pay?

If you’ve received rental income that hasn’t been fully reported, the HMRC Let Property Campaign (LPC) provides a way to come forward voluntarily. While this reduces the risk of enforcement, it does not eliminate penalties entirely. Understanding the potential cost is crucial.

Although more landlords are coming forward, the average tax recovered per disclosure fell to £9,063 in 2025-26, suggesting HMRC is now pursuing larger numbers of smaller cases as well as more significant liabilities.

Penalties depend on HMRC’s assessment of your disclosure:

• Careless but not deliberate – 0–30% of the unpaid tax.
• Deliberate but disclosed – 20–70% of the unpaid tax.
• Deliberate and concealed – up to 100% of the unpaid tax.

For example, if you owe £20,000 in tax:

• A careless penalty could add up to £6,000.
• A deliberate disclosure could reach £14,000.
• A deliberate and concealed case could cost the full £20,000 plus interest, which accumulates daily.

These penalties are in addition to interest on unpaid tax, meaning delays only increase the financial burden. Coming forward voluntarily through the LPC demonstrates cooperation and often results in significantly reduced penalties.

I Received a HMRC ‘Nudge Letter’ About Property Income – What Should I Do?

Receiving a HMRC nudge letter about property income can be alarming, but it doesn’t automatically mean you’ve done anything wrong. HMRC sends these letters to landlords when their records show potential discrepancies in declared rental income. Acting quickly is key to avoiding unnecessary penalties or interest.

Most voluntary disclosures are now prompted by HMRC nudge letters, as HMRC are increasingly using data-matching tools to identify landlords whose declared income may not align with property ownership records.

Here’s what to do if you receive a nudge letter:

1. Don’t ignore it – HMRC expects a response. Delaying can increase risk and penalties.
2. Check your records – Review rental income, expenses, and any previous tax filings.
3. Respond accurately – You may need to confirm your rental income or submit a correction.
4. Consider voluntary disclosure – If you’ve under-reported income, using the Let Property Campaign can reduce penalties.

This can affect accidental landlords too, including people who kept a property after moving in with a partner, inherited a property, or temporarily moved abroad and did not realise they had taxable rental profits to disclose.

Ignoring the letter or guessing what to do could result in higher fines, interest, or even a HMRC investigation.

How Far Back Can HMRC Go for Undeclared Rental Income?

One of the most common questions landlords ask is how far back HMRC can go when rental income has not been declared. The answer depends on an important first question: did you file a tax return for the relevant year, or was no return filed at all?

The general rules:

• Where a tax return was filed but rental income was omitted or under-reported, HMRC’s normal assessment time limits are usually based on the taxpayer’s behaviour: up to 4 years for ordinary errors, up to 6 years for careless behaviour, and up to 20 years for deliberate behaviour.

If no tax return was filed and the taxpayer failed to notify HMRC of a liability, HMRC can assess unpaid tax for up to 20 years, even where the failure was not deliberate, unless the taxpayer had a reasonable excuse and put things right without unreasonable delay once that excuse ended.

• This distinction is important. Behaviour is key for inaccuracies in tax returns that were submitted, but for years where no return was filed, the focus is often whether there was a failure to notify and whether a reasonable excuse can be evidenced. If a reasonable excuse applies and the taxpayer acted promptly once it ended, the 20-year failure-to-notify time limit may not apply, and HMRC would then look to the normal time limits instead.

This means that rental income from several years ago may still need to be disclosed, and the correct position can depend heavily on the facts. The longer you delay addressing undeclared income, the higher the potential financial risk from tax, interest and penalties.

With HMRC’s data-matching capabilities expanding and MTD creating more regular reporting obligations, landlords should not assume historic rental income issues will go unnoticed.

Contact us to understand how far back HMRC could go in your case and get expert guidance on regularising your rental income accurately and compliantly.

What are the next steps?

If you think you may have rental income that should have been declared, the first step is to establish exactly what has happened and the years involved.

Don’t assume that because the issue happened several years ago it is too late to deal with it. Equally, receiving a letter from HMRC doesn’t necessarily mean that HMRC’s understanding of your tax position is correct.

At ETC Tax, we can help you review your circumstances, establish the extent of any undeclared income and determine the appropriate route for putting matters right. Where the Let Property Campaign is appropriate, we can support you through the disclosure process, including:

• reviewing historic rental income and allowable expenses;
• establishing which tax years need to be included;
• calculating the tax and interest potentially due;
• considering the appropriate penalty position based on the circumstances;
• preparing and submitting the disclosure to HMRC; and
• corresponding with HMRC where necessary.

The important thing is not to ignore the issue. The sooner you seek advice, the more opportunity there may be to minimise tax exposure, interest and penalties.

If you have undeclared rental income, have received a property-related nudge letter, or are unsure whether your rental income has been reported correctly, contact ETC Tax to discuss your position with one of our tax specialists.

“I Want to Reduce Inheritance Tax… But I’m Not Ready to Let Go.”

If I had £1 for every time someone told me: “I’d like to reduce inheritance tax… but I’m just not ready to hand everything over to the children.”

…I’d probably have enough to pay the inheritance tax myself.

It’s one of the biggest reasons people put off planning. Not because they don’t understand inheritance tax. Not because they don’t think it’s important. But because they assume they only have two choices:

• Keep everything and potentially pay a significant inheritance tax bill.
• Give everything away and hope for the best.

The reality is that good inheritance tax planning is rarely that black and white. In fact, the earlier you start planning, the more options you usually have.

The biggest misconception about inheritance tax planning

Many people think inheritance tax planning is simply giving assets away.

That can certainly form part of a strategy, but it’s only one of many options.

The challenge is that once you’ve built up wealth over many years, whether that’s a successful business, investment portfolio or family home, it can feel uncomfortable giving away something you’ve worked incredibly hard to create.

You may still rely on the income. You may want to remain involved in decisions. You may simply like the security of knowing it’s yours.

None of that is unusual. In fact, it’s probably the most common conversation we have.

Planning early gives you choices

One of the biggest mistakes we see is people waiting until they feel “ready.” Unfortunately, tax legislation doesn’t wait.

As people get older, their options often become more limited. Some planning relies on surviving for a number of years after making gifts. Other strategies work best when assets are transferred before they have grown significantly in value.

The earlier planning begins, the greater the flexibility to build a strategy that works for both your family and your own financial security.

Giving assets away doesn’t have to mean giving up control

One of the biggest myths surrounding inheritance tax planning is that you immediately lose all control. In reality, there are a number of planning options that may allow you to retain varying degrees of influence, depending on your circumstances and objectives.

For example, trusts can sometimes help protect assets for future generations while allowing trustees to oversee how and when beneficiaries receive them.

Family Investment Companies are becoming increasingly popular for families looking to pass future growth to the next generation whilst maintaining control over how the underlying investments are managed.

Business succession planning can also allow the next generation to become involved gradually rather than through one significant transfer. Every family’s circumstances are different, but the common theme is that good planning isn’t about giving everything away overnight.

It’s about finding the right balance between protecting your own future and reducing unnecessary tax.

Inheritance tax planning isn’t just about tax

This is something we spend a lot of time explaining to clients. The tax is often the easy part. The difficult part is making sure your wishes are fulfilled.

Who will run the business? Should children inherit equally if only one works in the company? How do you protect family wealth if relationships break down? How do you avoid creating conflict between siblings?

These questions often have a much bigger impact on a family’s future than the tax bill itself. That’s why inheritance tax planning and succession planning should almost always be considered together.

The best time to start isn’t when you’re ready

It’s now.

That doesn’t mean making dramatic decisions tomorrow. It means understanding what your options are. A conversation today doesn’t commit you to anything. It simply means that when you are ready to make decisions, you have the widest possible range of planning opportunities available. Waiting until there is a health concern, a business sale, or retirement on the horizon often removes options that could have been available years earlier.

Good planning creates flexibility. Late planning often creates compromises.

Frequently Asked Questions

Can I reduce inheritance tax without giving everything to my children?

Often, yes. Many inheritance tax strategies are designed to strike a balance between reducing tax and retaining an appropriate level of control. The right approach will depend on your assets, family circumstances and long-term objectives.

Can I put my house into a trust and avoid inheritance tax?

Not automatically. This is one of the most common misconceptions. Simply placing your home into a trust does not remove it from your estate for inheritance tax purposes, particularly if you continue to live there without paying a full market rent. These arrangements need careful consideration and specialist advice.

Should succession planning and inheritance tax planning be done together?

Absolutely.

Passing wealth efficiently is only one part of the picture. Making sure the right people receive the right assets at the right time and that businesses can continue successfully is equally important.

Do I need specialist advice?

Inheritance tax planning is rarely a one-size-fits-all exercise. The right strategy depends on your assets, family dynamics, future intentions and attitude to retaining control. Taking advice early can often uncover planning opportunities that simply aren’t available later.

Next Steps

Are you thinking about IHT and not sure what to do for the best? This is where ETC Tax an support and guide you. Send us some details by clicking here and we will be in touch.

“Under “staircasing” – a purchaser of a part-share of a property has the choice between:

 

1. Electing to pay any SDLT due now based on the property’s full market value at that time, or 
2. Paying no SDLT until the purchase of further share(s) takes their ownership share over 80%.

 

If a purchaser elects to pay SDLT on the market value, they are choosing to pay more SDLT “now” than strictly necessary, in order to avoid paying any SDLT in future when their share goes above 80% (when higher rates/bands may apply, and the property’s market value is likely to have risen): they are paying now to save tax in future.

 

For many purchasers, obvious financial constraints imposed by market conditions may simply prevent them to not electing for the market value “now”, or they may just choose to leave the SDLT question for another day!

 

In your client’s case, if they initially opted to pay any SDLT on full market value, there is no SDLT consider on subsequent purchases of further shares.”