UK and International Tax news

Key Tax Announcements In Today’s Budget

Wednesday 30th October 2024

The new Chancellor has announced the following key tax changes:

From 30 October 2024

  • CGT rates will increase from 10% to 18% for basic rate taxpayers and 20% to 24% for higher rate taxpayers, whilst the higher rate for residential property remains at 24%
  • Lifetime limit for gains qualifying for Investors’ Relief is reduced from £10m to £1m
  • SDLT surcharge for purchases of additional dwellings will increase from 3% to 5%
  • Rules tightened for close company loans to participators, transfers of UK pension funds abroad, Employee Ownership Trusts, Employment Benefit Trusts and liquidation of Limited Liability Partnerships

From January 2025

  • VAT will apply to private school fees

From April 2025

  • Increase in rate of Employer NICs from 13.8% to 15%, together with reduction of Secondary Threshold from £9,100 to £5,000
  • Increase in Employment Allowance for small businesses’ ERNIC from £5,000 to £10,500
  • Extension until March 2026 of the 100% first year allowance for qualifying expenditure on zero-emission cars and charging points for electric vehicles
  • Abolition of the remittance basis of taxation for foreign domiciled individuals, to be replaced by a ‘residence-based scheme’
  • CGT rate on disposals qualifying for Business Asset Disposal Relief increased from 10% to 14%
  • CGT rate on ‘carried interest’ increased to 32%
  • IHT Agricultural Property Relief to be extended to land managed under an environmental agreement with government or other approved bodies
  • 40% business rates relief for retail, hospitality and leisure businesses on values up to £110,000
  • Charitable business rates relief no longer available for private schools
  • Fuel duty remains frozen, and the temporary 5p cut announced in March 2024 will be extended to 22 March 2026
  • Rate of interest on late paid tax will increase by 1.5%
  • Above inflation increases in National Living Wage and State pension
  • As previously announced, the advantageous tax treatment of Furnished Holiday Lettings will no longer apply

From April 2026

  • CGT rate on disposals qualifying for Business Asset Disposal Relief increased from 14% to 18%
  • ‘Carried interest’ moved to the income tax regime, with a discount for certain qualifying disposals
  • IHT Agricultural Property Relief and Business Property Relief at 100% will only apply to the first £1m of combined value; above that limit, the maximum relief will be 50%
  • IHT Business Property Relief restricted to 50% for all ‘unlisted’ shares quoted on recognised stock exchanges such as the Alternative Investment Market
  • Introduction of Making Tax Digital for Income Tax Self-Assessment

Later Changes

  • Unused pension funds and death benefits payable from a pension will be included in a person’s death estate for IHT purposes from 6 April 2027
  • Freezing of personal income tax allowances and rate bands will end with 2027/28, and inflationary increases will be reintroduced for 2028/29
  • Inheritance tax nil rate bands will be frozen at their present levels until April 2030, extended by two years from the previously announced date
  • ISA and Junior ISA investment limits fixed at their current levels until April 2030
  • Company car tax rates announced for 2028-29 and 2029-30, and the incentives for purchasing electric vehicles will be maintained

The Firm’s October 2024 Budget Summary will be available shortly.

 

If you would like more information on the above, please contact Keith Rushen on 0207 486 2378.

 

 

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