Autumn Budget 2024

The Chancellor of the Exchequer Rachel Reeves delivered her first Budget yesterday under the new Labour Government. After much speculation the Budget has brought about clarity in various tax issues that may affect you in the coming years. As predicted, there have been a number of significant tax increases and we have  summarised some of the changes below.

• One of the major changes announced is the abolition of the remittance basis of taxation from 6^th April 2025. This will be replaced by the Foreign income and gains (FIG) regime, which will allow new arrivals to the UK (individuals who have not been UK resident in the last 10 tax years) to claim 100% relief on foreign income and gains in the first 4 years of UK residence.
• The protection from tax on foreign income and gains arising within settlor-interested trust structures will no longer be available for non-domiciled and deemed domiciled individuals who do not qualify for the four year foreign income and gains regime.
• A Temporary Repatriation Facility (the Facility) will be available for individuals who have previously claimed the remittance basis. This will be available for a limited period of 3 years to allow taxpayers to remit foreign income and gains that arose prior to the changes at a reduced tax rate.
• Other major changes include the increase of capital gains tax for disposals or assets that are not residential properties. The basic rate of 10% will increase to 18% and the 20% rate will increase to 24%. No changes will be made to the rates applying to the disposal of residential properties of 18% and 24%.
• The rate of capital gains tax that applies to carried interest will increase from 18% and 28% to a flat rate of 32%.
• There are no changes to the Inheritance tax nil rate band, however the Budget confirms that unused pension funds and death benefits will form part of a person’s estate for IHT purposes from 6^th April 2027.
• Agricultural Property Relief and Business Property Relief will be capped at a limit of £1 million.
• Other matters that may also be relevant include the introduction of VAT on private school fees from 1^st January 2025 and the increase of stamp duty on second homes from 3% above the standard rates to 5% above the standard rates which will come into effect today.

We have addressed these changes in more details in our article below:

Autumn Budget Summary 2024

Should you wish to discuss any of these changes or would like to understand how the changes may impact you, please do get in touch.