The Autumn Budget 2024 - Key Changes
01/11/2024
The Autumn Budget 2024 - Key Changes
The most anticipated Budget in years has now been delivered.
While perhaps gentler than many had feared, there were a number of tax announcements that could affect you. We have provided some details of these changes below.
Rest assured, your adviser is reviewing your plan carefully and will be in touch with you soon to discuss any changes you might wish to consider.
Source: Financial Times
CAPITAL GAINS TAX
The main rates of capital gains tax have now increased from 20% to 24% if you are a higher rate tax payer, and from 10% to 18% if you are a basic rate taxpayer. This will now apply to the disposal of any assets apart from residential property and carried interest.
The rate of capital gains tax that applies to business asset disposal relief and investors’ relief will also increase from 10% to 14% after 6 April 2025, and then to 18% after 6 April 2026.
The lifetime limit for business asset disposal relief will remain at £1m.
EMPLOYERS' NATIONAL INSURANCE
Employer’ NI will increase from 13.8% to 15% from April 2025. In addition, the threshold at which employers start paying NI on each employee’s salary will drop from £9,100 to £5,000 a year.
However, in an effort to protect small businesses from the hike, the employment allowance will also rise – allowing eligible employers to reduce their NI liability by up to £10,500.
INHERITANCE TAX
The freeze on inheritance tax thresholds has been extended from April 2028 to April 2030. Meaning the nil-rate band will remain at £325,000, the residence nil-rate band at £175,000, and the residence nil-rate band taper will continue to start at £2m.
After 6 April 2027, pensions will form part of a person’s taxable estate, and so could be liable for inheritance tax. This change will apply to both defined contribution and defined benefit schemes. The current distinction in treatment between discretionary and non-discretionary schemes will also be removed.
Agricultural and business relief will also be reformed. From 6 April 2026, the 100% rate of relief will apply only to the first £1m of combined agricultural and business property. After that threshold, the rate of relief will be just 50%.
STAMP DUTY LAND TAX
Stamp Duty Land Tax (SDLT) will rise from 3% to 5% for those purchasing second homes or buy-to-let residential properties, as well as for companies purchasing residential property.
This measure also increases the single rate of SDLT payable by companies and other non-natural persons purchasing dwellings over £500,000, from 15% to 17%.
INCOME TAX & NATIONAL INSURANCE
There will be no extension of the freezes to income tax and national insurance thresholds, imposed by the previous government in 2022. From 2028-2029, personal tax thresholds will be uprated in line with inflation once again.
NON-DOM TAX STATUS
The non-domicile tax regime is to be abolished from 6 April 2025. Domicile will no longer be a feature of the UK tax system – it is to be replaced by a system based on residency.
ENTERPRISE INVESTMENT SCHEMES & VENTURE CAPITAL TRUSTS
In a bid to bolster growth and investment in the UK, the enterprise investment scheme (EIS) and venture capital trust (VCT) scheme will both be extended to 2035.
Should you have any questions or urgent concerns, please do not hesitate to contact your adviser.
