Impact of UK’s Spring Budget 2024 on Real Estate
In this article, we delve into the significant announcements made in the UK’s Spring Budget 2024 and their direct impact on the real estate sector. Our focus is on dissecting these developments to provide valuable insights for real estate professionals and investors navigating the evolving landscape of UK property markets.
- Reserved Investor Funds (RIFs):
The government has introduced Reserved Investor Funds (RIFs), a new tax-transparent unauthorised vehicle aimed at enhancing the UK’s funds regime. RIFs are expected to be particularly attractive for investment in commercial real estate. The Finance (No 2) Bill 2024 will define RIFs and outline their tax treatment. RIFs will be subject to Stamp Duty Land Tax (SDLT) as companies.
- Replacing Tax Rules for Non-UK Domiciliaries:
The Chancellor announced a significant reform of the UK’s regime for taxing non-domiciliaries. The remittance basis of taxation will be replaced with a simpler residence-based regime effective from 6 April 2025. New arrivals to the UK opting into the regime will enjoy a four-year grace period of tax exemption on foreign income and gains.
- Changes to Anti-Avoidance Legislation: Transfer of Assets Abroad Provisions:
Legislation will be introduced to partially reverse a Supreme Court decision, ensuring that anti-avoidance rules apply to certain indirect transfers of assets abroad by UK resident individuals through companies. These changes will take effect from 6 April 2024.
- . Stamp Duty Land Tax — Abolishing Multiple Dwellings Relief (MDR):
The Spring Finance Bill 2024 will abolish Multiple Dwellings Relief (MDR) for SDLT, effective from 1 June 2024. MDR allows bulk purchase relief for two or more dwellings in a single transaction. However, it will still apply to contracts exchanged on or before 6 March 2024.
These updates are crucial for real estate investors and professionals operating in the UK market. Stay informed to navigate the evolving landscape effectively.