After a prolonged struggle lasting five months, the matter was finally resolved with your help. I believed I had concluded my dealings with the firm.

However, at the end of July, while logging into my parents’ bank account to settle their care bill, I discovered a surprising Chaps credit of £54,000 from Scottish Widows had been deposited into their account a few days prior. The payment details resembled those from a previous transaction they received from Clerical Medical. This revelation was unexpected, as my father had provided me with a complete list of his accounts and investments, which did not include a second Clerical Medical account. I decided to wait a few days for any relevant correspondence from the insurer.

While normally such a payment might not raise alarms, it posed a significant concern due to my parents’ ongoing home care funded by two live-in caregivers for the past five years. Their financial resources have dwindled to the point where they may qualify for local authority assistance. I regularly update Horsham adult social services about their finances, and a financial review was scheduled for September.

My main worry was that if this payment was indeed a mistake, it stayed in my parents’ account through the council’s assessment, potentially keeping them above the eligibility threshold for financial aid. Furthermore, if the funds needed to be returned but no documentation was provided (we received no communication from Clerical Medical), it could appear suspicious, suggesting we were trying to manipulate their account for financial gain, ultimately harming their financial standing.

During a conversation with customer support, the representative initially cited two account numbers. After placing me on hold for a manager, he returned, explaining it was a mistake; he had mistakenly repeated the same account number. He logged my contact as a new complaint and claimed a letter regarding the credit had been sent to my parents, though no letter was received.

The following day, another customer service representative contacted me. I elaborated on the urgent nature of the issue due to the approaching financial assessment. He reviewed the case and mentioned there was an attempt made in May to deposit money into my parents’ closed Clerical Medical account, which had remained dormant until it was processed as the settlement amount plus interest.

I raised the issue of the second account number, and he assured me it would be investigated promptly in light of the financial assessment timeline. Furthermore, I requested a copy of the purported letter sent at the end of July and ensured that all future correspondence was directed to me; however, I have yet to receive a copy.

Since then, I have had no further communication from Clerical Medical, and upon following up, I was informed that another representative was assigned to my complaint. Now, in September, I am still awaiting a follow-up call or confirmation that action is being taken.

It appears that Clerical Medical continues to disregard my parents’ financial challenges, and this error on their part could severely impact their financial situation.

Response from Jill

While many might be pleased to unexpectedly receive £54,000 in their bank account, for your parents, who are tasked with returning the funds to Clerical Medical while also fearing it could jeopardize their financial aid eligibility, it is a serious setback.

I reached out to Clerical Medical to rectify this situation, which is entirely their fault. Two weeks later, they confirmed that you had successfully returned the funds, compensated you with £600 for their poor customer service, and provided a letter clarifying the circumstances surrounding the money’s appearance in your parents’ account and, significantly, why it was subsequently removed.

You have now completed the necessary forms for the local authority assessment and are preparing to submit them. You had to return the £54,000 to Clerical Medical in three transactions due to daily transfer limits, and you are still waiting for written confirmation that they have received the funds. This lack of responsiveness comes as no surprise.

Query on Gifting £100,000 Without Tax Concerns

I received £150,000 from my parents as an inheritance in 2017, which I have kept aside for potential needs. Twenty years ago, this would have been invaluable for covering mortgages and education expenses, but I don’t have such needs now.

I plan to gift £100,000 to my two children. Currently, my estate falls below the threshold for inheritance tax (IHT). My primary asset is my house, valued at approximately £500,000, alongside £200,000 in savings and assets. However, my wife’s mother has a limited time left to live, and upon probate, her estate will likely equal £250,000.

This anticipated inheritance could push us into the IHT bracket, creating a liability of around £40,000 for my beneficiaries when the house is sold.

If I gift £100,000 to my children now, will they face IHT if I pass away before seven years elapse?

Response from Jill

Although you are 77 and your wife is 70, you’re not concerned about financial depletion in your later years, confident pensions will cover future expenses, including long-term care. Your estate, valued at roughly £950,000, includes your home (£500,000), savings (£200,000, including the £150,000 inheritance), and the expected inheritance from your mother-in-law (£250,000).

According to Claire Roberts, a tax expert, your estate will qualify for two IHT-free allowances when the first of you passes. The standard nil-rate band allows for £325,000, while the residence nil-rate band provides another £175,000, applicable when the main residence is inherited by direct descendants such as your children.

“Transfers between UK-domiciled spouses during their lifetime or after death are exempt from IHT. The nil-rate bands can also be transferred to the surviving partner, allowing up to £1 million of an estate’s value to be sheltered from IHT during the second death. Thus, your estate should not face IHT, provided it is passed to your children,” she noted.

However, you intend to provide financial support to your children now. Roberts explained that a cash gift could be classified as a potentially exempt transfer (PET). “This means that if you survive seven years from the date of the gift, its value will not contribute to your estate’s IHT calculations.”

While considering a £100,000 gift from your joint savings account, it’s essential to note that funds in a joint account are generally considered equally owned. However, HMRC attributes the beneficial interest based on the account holders’ contributions. Thus, this advancement would primarily be viewed as your gift.

Roberts clarified: “If you do not survive the seven-year period after the gift, and presuming you pre-decease your wife, the nil-rate band available on your wife’s passing would be reduced by the amount of the failed PET, to £225,000.

“However, the current anticipated value of your estate after the gift would net £900,000 in total IHT allowances on your wife’s death, meaning no IHT obligations would arise. Alternatively, should estate values increase, your wife could make the gift if it seems likely she would outlive you.”

Your decision to offer financial gifts now won’t incite IHT liability on your estate at present. Nonetheless, taking this action would not incur taxes right now, given existing regulations. While there are speculations over potential IHT alterations in the upcoming budget, any new laws implemented after your gifting are very unlikely to be retrospectives.

Dispute Over Mobile Contract Cancellation With O2

I entered into a mobile broadband agreement with O2 but canceled it within the 14-day cooling-off period. However, I received a debt collection notice shortly after because I hadn’t returned their device. The return was not processed because O2 failed to send the necessary return packaging.

After two weeks and numerous calls to customer service attempting to arrange the return, O2 withdrew £500 from my account for the device.

Despite additional online conversations with O2, where customer service acknowledged their mistake, my funds have yet to be returned, and my credit rating has been negatively impacted. Attempts to file a complaint have also not yielded progress.

The stress of this situation is overwhelming, and I am at a loss on how to resolve it.

Response from Jill

You returned the device to Virgin, affiliated with O2, using your own packaging and courier service, an option Virgin had not previously suggested.

Virgin stated that your contract commenced on August 3, the day after your enrollment, rather than on August 5, when the equipment was received. By the time you called to cancel on August 19, you had surpassed the cooling-off period; therefore, the £500 early termination fee was deemed valid, notwithstanding any issues related to the return packaging.

However, the company also conceded your customer service experience was subpar and acknowledged misinformation from one of its representatives. They promised a refund of the £500 as an exceptional goodwill gesture after processing the device’s return.

They affirmed that the £500 charge had not been forwarded to debt collectors and denied any actions that could alter your credit score. I recommend checking your credit report to verify its accuracy, as the 17-point change might simply correspond to increased credit card or overdraft usage.

For further assistance, please email questionofmoney@sunday-times.co.uk or write to Question of Money, The Sunday Times, 1 London Bridge Street, London SE1 9GF. Submit only copies of original documents. Letters should be exclusive to the publication. We offer guidance without legal accountability and regret that we cannot respond to every inquiry received.

In a candid interview, the 57-year-old Patterson expressed his long-term commitment to this position, stating, “Over my lifetime, I’m hoping that we make a real breakthrough.”

Patterson’s new role adds to his existing non-executive appointments, including board memberships at online grocery retailer Ocado, the tech platform Kraken, and the educational platform Kahoot. He transitioned back to the UK two years ago after his tenure as chief strategy officer at Salesforce, a software powerhouse valued at $329 billion until 2023.

Speaking from The Park, a restaurant located near London’s Hyde Park, Patterson emphasized the critical nature of the mission for the nation’s health care system and economy. Unlike previous chairs of the organization, he noted that he has not had direct family experience with the disease, adding, “I’m unusual on the board because I don’t know somebody directly in my family who’s suffering from dementia… if nothing changes, one in two of us will be directly affected by dementia — either by caring for someone with the condition, developing it ourselves, or both.”

Former WH Smith and SSP Group CEO Kate Swann, who briefly held the chair position in 2022, shared her own experiences with dementia, highlighting the profound effect the illness had on her mother, whom she described as “a force of nature; the matriarch of our family.”

Despite the growing dementia crisis in the UK, which has nearly one million individuals currently living with the condition, there are no available treatments through the NHS to halt or prevent its progression. Alzheimer’s Research UK estimates the annual cost of dementia at £42 billion, with families bearing nearly two-thirds of that financial burden.

Since its inception in 1992, the charity has allocated over £237 million to dementia research, funding advancements in drug discovery, diagnostics, and the genetic understanding of the disease. Last year alone, investments totaled approximately £27 million.

The organization aims to double its income, which has grown to £57 million. Patterson’s formal transition into the role on February 12 follows a recommendation from David Mayhew, vice-chairman of JPMorgan’s global investment bank, who knows Patterson from his days at BT, where Mayhew served over a decade as chairman before becoming vice-president in 2023.

After a distinguished 34-year corporate career, including marketing positions at Procter & Gamble and Telewest, Patterson plans to leverage his extensive network to enhance funding and raise awareness about dementia, including its impact on lifestyle choices and employee responsibilities.

“It’s not as though dementia only affects people who are retired,” he remarked. “It can also impact individuals at an earlier age. Many caregivers are family members who may need to take time off work, making this a serious issue for employers to consider.”

Located at Granta Park, a scientific and technology hub in Cambridge, the charity is beginning to see the benefits of the research it has financed, according to Patterson, who stressed the persistent gap in treatment options and awareness concerning dementia’s causes.

In October, the NHS rejected the drug donanemab, developed by Eli Lilly, despite evidence showing it can delay the progression of Alzheimer’s by several months. The National Institute for Health and Care Excellence (Nice) stated the drug did not demonstrate value for the NHS, with cost-effectiveness estimates significantly exceeding usual thresholds.

Despite the acceptance of the drug by the Medicines and Healthcare Products Regulatory Agency (MHRA) for early-stage Alzheimer’s patients, it remains financially unreachable for most individuals. Similarly, another drug, lecanemab, was also denied NHS access despite MHRA approval.

Both medications aim to reduce amyloid plaque buildup in the brains of Alzheimer’s patients to improve memory and cognitive functions.

Patterson expressed concern regarding the disparity in funding for dementia compared to oncology, where significant advances have been made by pharmaceutical companies, resulting in more effective and economical treatments.

“When treatments are available, or access is limited due to budgets, it’s profoundly frustrating for patients and families,” he stated.

He also pointed to the promising role of artificial intelligence in expediting drug development, advocating for a mixed funding model that incorporates both paid and free services, although he noted that shifting perceptions on healthcare financing is challenging.

Patterson, a father of four with his American wife, reached this pivotal moment after deciding to step away from corporate leadership. “I finished at Salesforce in January 2023, and I knew I was ready for a change,” he reflected. “CEO positions are much tougher than they appear in terms of glamour and compensation, involving many sacrifices that can affect health and relationships.”

When Mayhew contacted Patterson, the board sought someone who could invest the necessary time and bring experience to the important role. “They were looking for someone with years ahead of them, and I hope to fulfill that,” he concluded.

While many companies rely on equity, Hometree operates as a technology-enabled services business rather than a software venture. Phelan emphasizes the importance of managing capital efficiently, expressing that it is not advantageous for shareholders when large amounts of their equity are allocated to long-term assets in homes. Moreover, equity financing is often the costliest form of capital, as it leads to dilution for both the founder and shareholders.

Phelan points out that banks and capital markets are increasingly eager to invest in genuinely sustainable assets, but they are facing a shortage of scalable projects. After eight years of building Hometree, the company reached a level of scale and credibility, particularly in the home gas boiler insurance sector, allowing it to approach banks for discussions on financing.

In the U.S., many banks have provided similar financing options, and Barclays has executed several deals there. When exploring opportunities in Europe, particularly in Germany and Spain where Barclays had previous engagements, a venture capital investor introduced Hometree to Barclays representatives at a conference. This led to an invitation to Barclays’ head office in Canary Wharf, where they met the head of their European securitization practice, who oversees sustainable financing initiatives. With a commitment to allocate £1 trillion towards sustainability by 2030, Barclays was keen on exploring the potential of developing a new asset class for green financing in Europe.

Financing environmentally friendly home improvements presents a significant opportunity, but the lack of established players in the market made it imperative for investment firms to decide between waiting for solutions to materialize or partnering with emerging businesses to help build a scalable infrastructure.

Despite existing challenges related to heat pump regulations and government backing, Phelan envisions a future where Hometree contributes to the transition from gas to electric heating over the next few decades. In 2015, Phelan outlined a business plan centered on “Financing green home improvements,” which has remained a core part of Hometree’s mission, even as the market seemed premature for such a venture initially. He transitioned from a focus on residential solar energy, leading to the current emphasis on heating solutions after subsidies for solar were retracted.

A major hurdle for Hometree has been the ongoing prevalence of gas heating systems compared to heat pumps. Recognizing the difficulties of operating purely as an installation service—where marketing is vital to attract customers for infrequent projects—Hometree sought to innovate its business model. This led to the development of insurance products to engage a customer base interested in heating and home electrification, alongside building a network of engineers trained in heat pump installation.

Phelan notes that their success is not purely coincidental; extensive preparation played a key role. Following a significant equity funding round led by Legal & General, media visibility aided in establishing credibility with potential debt investors. The substantial capital available on their balance sheet demonstrated Hometree’s ability to invest in necessary systems and teams to handle expectant growth.

During the due diligence phase, debt investors wanted insights from Hometree’s equity shareholders and its board regarding governance and operational controls. Notably, Hometree’s chairman, Tommy Breen, previously led Homeserve during its £4.1 billion sale to Brookfield in 2022, which adds to the investor confidence.

For debt investors, earning returns through interest is paramount, yet fostering robust relationships with the Financial Conduct Authority and ensuring strong governance structures are critical to the overall strategy. Hometree has built a fully FCA-regulated insurance arm, which has reinforced its commitment to compliance and governance—traits that Phelan believes are essential for longevity in a market where misaligned incentives can lead to failure.

Looking ahead, Hometree aims to onboard 500 to 1,000 providers of solar, heat pump, and battery solutions onto its platform within the next few years. Achieving this will not only enhance the credibility of their distribution network but also ensure compliant operations that underpin the expected returns on investment from partners like Barclays and CPP.

Simon Phelan discussed these insights with Richard Tyler, editor of the Times Enterprise Network.

Brands that facilitate purchases on platforms like TikTok Shop and Instagram Shopping are embracing an effective strategy, with 76 percent of UK consumers intending to shop this way this year, a notable increase compared to the previous year.

According to a survey conducted by Retail Economics involving 8,000 participants, 21 percent of global shoppers made purchases directly through social media in 2024. In the UK, this figure was even higher, exceeding 25 percent.

Despite the trend, the study revealed that only 46 percent of online retailers are currently allowing direct sales through social media. This is particularly striking given that 66 percent of consumers believe a strong social media presence significantly influences their purchasing decisions.

Platforms like TikTok Shop allow users to buy products while consuming video content from brands and influencers without exiting the app. Notable brands such as L’Oréal, Karen Millen, and Sweaty Betty have begun utilizing TikTok Shop in 2024.

A survey of 400 e-commerce businesses by Retail Economics indicated that 84 percent experienced growth in 2024, with average growth surpassing 5 percent. The consumer survey pointed to a resurgence in in-store shopping, as 54 percent of respondents plan to visit physical stores more frequently this year.

Albert Ko, CEO of the US retail software company Auctane, which sponsored the surveys, remarked, “Retailers must evolve their strategies to remain competitive. With consumer expectations at an all-time high, the pathway to growth is rooted in innovation, flexibility, and a customer-focused approach.”

The consumer survey also highlighted a strong awareness of costs, with nearly 60 percent of buyers expressing concern over increasing delivery and return expenses, and just under half being apprehensive about delivery times and package arrival.

On Monday, Macy’s revealed that an employee had “intentionally made erroneous accounting accrual entries” related to delivery costs from the fourth quarter of 2021 to the third quarter of 2024.

The employee, who was in charge of accounting for small package delivery expenses and is no longer with the company, allegedly hid between $132 million and $154 million during that timeframe.

An independent investigation confirmed that no other employees were involved and that the discrepancy did not impact cash management or vendor payments.

Tony Spring, chairman and CEO of Macy’s, stated: “At Macy’s, Inc., we foster a culture of ethical conduct. As we work to conclude the investigation as quickly as possible and manage this situation appropriately, our teams are dedicated to serving our customers and executing our strategy for a prosperous holiday season.”

Macy’s, which encompasses the Bloomingdale’s brand, has its roots in a small dry goods store established in New York City in 1858 and now operates over 500 retail locations.

Preliminary results for the third quarter released Monday indicated a 2.4 percent decrease in sales, totaling $4.74 billion, falling short of analyst predictions of $4.77 billion based on estimates from LSEG. Spring noted that comparable sales in November “are trending ahead of third-quarter levels across all nameplates.”

The company had reported total revenues of $23.1 billion last year, which includes both in-store and online sales.

Macy’s shares, originally set to disclose results on November 26, dropped $0.20, or 1.2 percent, to $16.10 in pre-market trading.

The company anticipates releasing its complete third-quarter financial results and conducting an earnings conference call, during which it will outline its fourth-quarter and annual expectations, by December 11.

This announcement arrives as various retailers extend their Black Friday promotions to entice cautious shoppers. Macy’s, alongside other retailers like Amazon, Target, and Walmart, has already initiated significant discounts well ahead of Black Friday, which falls on November 29 this year.

Driven by the distressing thought of potentially losing his family’s farm, which has been in their possession for generations, Lucas embarked on this eight-hour journey to participate in a protest against proposed changes to inheritance tax relief affecting farmers.

He joined hundreds of tractors, farm machinery, and even tanks lined up along Whitehall as the agriculture community continued to voice their opposition to the new taxation policies.

Despite widespread backlash, Labour has remained firm in its stance, refusing to retract its plans to implement a 20 percent inheritance tax on farms valued above £1 million.

The proposed measures have sparked outrage from farmers and the food sector alike. In a wave of solidarity, major supermarket chains have supported the National Farmers Union’s appeal to overturn the policy, leading thousands of farmers to march in London following the recent budget announcement.

The protest on Monday was spearheaded by Save British Farming, a campaign group established by Liz Webster, who previously claimed the government is fostering a damaging culture war through its budget decisions.

Describing his arduous journey, Lucas expressed that it was “f***ing uncomfortable” and estimated he would return home around 3 a.m. on Tuesday. He is already an entrepreneur, having started a contracting business while still attending school, and purchased his first tractor on his 15th birthday; he now owns two.

The Lucas family operates a modest arable farm in Cambridgeshire, which has been passed down for nearly a century.

“It’s devastating, absolutely devastating,” Lucas shared. “To take over our little family farm, which spans 130 acres, I’d have to come up with a significant amount of money.

“The tax liability I’d face is more than what I would typically earn in a year. It could take us five years just to pay that off, and ideally, you should be able to draw a salary for your work.

“I don’t know any farmer who pays themselves a wage. Everyone’s doing it out of passion.”

He continued, “My great-grandfather started this farm, then my grandfather, then my uncle, and I hope it will be mine too. But if things keep going this way, the future is uncertain… it’s truly heartbreaking.”

Among those joining the protest were Richard Shepherd and his wife, Zoe, who are set to inherit the family dairy farm in Cheshire. They came to Westminster along with his parents, Ivan and Judy.

Shepherd revealed that their dairy farm faces a potential inheritance tax bill of £1 million. “The issue is that we already sell a lot just to cover that cost, which can hinder our working capital needed to produce milk and sustain future operations,” he explained.

He added, “Unfortunately, our industry already struggles financially, making it difficult to invest in daily operations and earn a living. With the inheritance tax on top of that, it risks crippling businesses across the country.”

Having risen early that morning, he and Ivan had already put in a few hours working on the farm before heading to the protest, with Ivan noting, “You don’t take time off.”

James Hardstaff, who claimed he’s “long past retirement age” but continues to work, traveled from Nottinghamshire on his vintage tractor. His family has farmed their land near Linby for over 300 years, and he represents the ninth generation in this legacy.

Hardstaff hopes to pass his farm down to his son and grandchildren but considers the inheritance tax changes a threat to their heritage. “This will significantly impact our family. It’s going to be tough,” he stated.

The family’s farm comprises over 2,000 acres, where they cultivate cereals, vegetables, and sugar beet. Nonetheless, surging costs in recent years have created financial strain.

“It won’t make things easier,” he concluded. “We are stuck with this government for another four years, and that’s not promising for us. The changes to the inheritance tax have compounded many issues we’ve been facing.”

“Since I was 13, I would come in every year to help with the gift wrapping. Even while in university, I made it a point to return. It never felt like Christmas began until I had been at the shop. On Christmas Eve, we often assisted men in a panic, asking, ‘I haven’t purchased anything for my wife. Can you help?’,” recalls Gatward, now 45.

Prior to joining her family’s business full-time in 2018, Gatward had a career in finance, notably at the Royal Bank of Scotland. She always intended to take over from her mother and aunt, who previously managed the store. “One of our fundamental principles as a company is longevity. Having thrived for 265 years, I aspire for the business to progress into the ninth generation and beyond.”

Charlotte has two young children, and her brother Ben, who isn’t part of the family business, has a daughter. Together, they hope that one of the next generation will step up as a future leader.

The profound family heritage came into clearer view last summer with a £200,000 renovation of their Hitchin building. This site has been home to the business for over 200 years after losing its first store to a fire, a tragedy that claimed the life of Charlotte, one of the owners, who attempted to retrieve her gold watch from the flames.

Gatward noted that the refurbishment not only modernized the shop but also revived elements of its rich history that she had previously only heard about. One story highlights a past owner, Bradley Gatward, who reportedly preferred music to managing the shop, often watching customers through a spy hole from the flat above.

“He lived above the store and would peer through a spy hole; if he found the customers undesirable, he’d retreat upstairs to continue playing his organ,” Gatward recounted. “During the renovation, we discovered the spy hole behind the old cabinets.”

Executing a renovation in a building steeped in memories posed a significant challenge, remarked Gatward. “Balancing modernization with the need to offer an exceptional in-store experience—something unreplicable by online retailers—while preserving the charm of our historical location and traditional ethos was crucial.”

The family’s strong emotional ties to the property made the Chancellor Rachel Reeves’s proposed reforms to cap property relief at £1 million particularly poignant.

“It’s quite alarming. We face the reality of potentially losing full property relief. Our roots have anchored us here for over two centuries—why should the government claim a chunk of tax every time this family business transitions down the line? That money isn’t idly sitting in an account; it’s tied to a property that’s irreplaceable,” Gatward expressed.

She stands alongside many family business owners voicing concerns over the Chancellor’s decisions regarding inheritance tax and property relief. Family Business UK argues that these changes, effective April 2026, could lead to over 125,000 job losses and diminish the economy’s output by nearly £9.4 billion. They have partnered with 24 additional trade associations that together represent 160,000 family enterprises and farms, urging the Treasury to reconsider their stance.

While the upcoming changes are unwelcome, they have prompted many family-owned companies to re-evaluate their succession strategies, according to Matthew Braithwaite, a partner at Wedlake Bell, a law firm.

Research from the Society of Trust and Estate Practitioners (Step) reveals that over two-thirds of family business proprietors lack a succession plan, with only 32% maintaining an updated will. This oversight places family enterprises at risk of urgent sales, increased taxes, and disputes, Step warns.

Braithwaite advises clients to undertake preparatory measures like estate valuation and create both a will and succession roadmap. He cautions against hasty decisions, such as prematurely transferring ownership to children in a bid to avoid new tax liabilities. “This might appear beneficial for inheritance tax purposes but could complicate ownership dynamics, leading to various opinions competing against each other,” he warned.

Jim Rankin, representing the sixth generation of his family at Rankin Brothers & Sons, a cork manufacturer established 250 years ago, advocated for simplicity. He noted that a disagreement between family factions in the 1950s led to a streamlined shareholder base with more effective governance.

“Two brothers moved the business to London while two stayed in Scotland, leading to a falling out over the company’s direction,” said Rankin. “My grandfather, who relocated to London, eventually bought out the other brothers, which helped stabilize control. Many family businesses over time become encumbered with overly large shares among diverse cousins and relatives, complicating decision-making.”

Rankin mentioned that after the autumn budget, he held discussions with auditors and legal advisors to brainstorm potential strategies to mitigate the impact of the new policies. “This has prompted us to reassess our arrangements, which are already well-structured to protect our family’s stake and ensure continuity,” he stated. He aims not to burden the next generation with excessive rules, believing it to be counterproductive.

Although the future of Rankin Brothers & Sons remains uncertain for the seventh generation, Rankin expressed he won’t pressure his 19-year old twin sons to join the company. If they choose to participate, he wants them to infuse their unique perspectives and innovative ideas. “It’s essential that each new generation enters with fresh thoughts—stifling their creativity would be the worst course for the older generation to follow,” he concluded.

Molly Broome, an economist at The Resolution Foundation, suggests that reworking IHT could provide much-needed revenue. Currently, the system is filled with loopholes that facilitate avoidance. Closing specific loopholes related to business and agricultural relief could potentially generate as much as £2 billion annually.

Moreover, a bold alternative would involve eliminating IHT entirely and instituting a new tax-free allowance for lifetime gifts and inheritances. Any significant contributions or inheritances exceeding this allowance would be taxed, with the burden resting on the recipient.

This proposed shift would rectify several issues with IHT. Primarily, converting the tax from one based on the donor’s gifts to one on the beneficiary’s income could align the tax with public perception, making it more comprehensible. Currently viewed as a tax on living family members, it is logical for IHT to function as a tax imposed on those receiving inheritances.

The proposed change would also eliminate a major loophole exploited to evade IHT: the strategy of transferring assets before death. This tactic is typically used by the affluent, allowing them to give away large sums at their discretion—a privilege not available to the majority.

Shifting the focus from estate taxation to a lifetime allowance would also promote broader distribution of inheritances. It would be financially wiser to divide an inheritance among several recipients, each benefiting from their own lifetime tax-free allowance, rather than concentrating it all on one individual. Even if motivated by tax minimization, the broader dispersion of wealth across generations benefits society.

Implementing a lifetime allowance would also align the UK’s IHT framework with international standards. According to the Organisation for Economic Co-operation and Development, the existing estate-based model is an outlier globally. Given the public’s disdain for IHT, this new approach could find considerable support.

Taxing those who inherit would simplify the understanding of IHT, curtail avoidance tactics, generate essential revenue, and enhance wealth transfer across society.

No

Darwin Friend of the TaxPayers’ Alliance, a group advocating for reduced taxes, argues against IHT reform. Often referred to as the “death tax,” inheritance tax is widely disliked due to its perceived unfairness and complexity that burden families during their most challenging times.

Since its introduction in 1986, numerous proposals have sought to alleviate the most troubling aspects of IHT. Although suggestions have included raising the tax-free threshold from £325,000 to £1 million, the definitive solution may well be to eliminate IHT entirely rather than allow its perpetuation as a meager revenue source.

Unfortunately, the trend appears to be towards making IHT even more detrimental. Proposals aimed at lowering thresholds or extending the seven-year gifting rule would disrupt family financial planning and instill anxiety among taxpayers nationwide.

The notion of introducing a lifetime allowance tax is particularly unwelcome, perceived as an unwarranted intrusion into personal finances, compelling taxpayers to track and reveal gifts exceeding a set amount.

Challenges arise in the valuation of various gifts such as interest-free loans, holidays, accommodations, and treasured family possessions, leading to potential disputes over what should be included or excluded from taxation.

Moreover, reforms adjusting tax rates based on a recipient’s income would perpetuate a divisive political sentiment centered around envy—a troubling trend. The wealthiest 1% account for a disproportionate share of income tax revenue, contributing nearly 29% while earning just 13.3% of total income.

Continuing this taxation strategy against those who primarily fund public services could lead to a heavier burden on average taxpayers. The government should strongly consider avoiding any income-based tax initiatives related to inheritance.

In the last quarter of 2024, the number of businesses in critical distress soared by 50.2% compared to the previous quarter, reaching a total of 46,853, according to data from Begbies Traynor.

This insolvency specialist highlighted that the construction sector is particularly hard-hit, with 6,830 companies showing significant signs of distress.

Consumer sectors are also grappling with heightened financial pressure, with the leisure industry seeing a staggering 76% increase in distress, while general retailing experienced a 48% rise. The sector has suffered several high-profile failures over the past year, including well-known names like Homebase, Carpetright, and The Body Shop, leading to considerable job losses.

Ric Traynor, executive chairman of Begbies Traynor, noted that the data reflects the extreme challenges facing many distressed UK businesses as 2025 unfolds.

He remarked, “For numerous companies already plagued by weak consumer confidence and escalating borrowing costs, the recent hike in national insurance contributions and the national minimum wage—announced in the latest budget—could prove disastrous.””

The research incorporated financial distress indicators such as county court judgments for unpaid bills and winding-up petitions filed by creditors against businesses.

Julie Palmer, a partner at Begbies Traynor, stated, “Almost every sector is experiencing an extraordinary rise in firms at imminent risk of insolvency in the coming year.””

She emphasized that the consumer-facing sectors, particularly following a lackluster Christmas, are under immense pressure, with rising operational costs and increasing wages exacerbating an already precarious situation. “Many businesses operate on narrow profit margins, and I worry that the current circumstances will inevitably lead some to fail.””

Despite a 5% decrease in overall corporate collapses, down to 23,872 in 2024, data from the Insolvency Service indicates that personal insolvencies rose by 14%, increasing from 103,434 to 117,940. Tim Cooper, president of R3, the trade organization for insolvency and restructuring professionals, highlighted that this trend signifies a significant and urgent issue regarding consumer debt in the country.