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Autumn Statement 2024 - An Initial Response

So, after months of speculation, the first autumn Budget of our new Government is out.

We know that many of you have been rightly concerned about the potential impact of today’s budget, so we wanted to address those concerns as quickly as possible. 

In the coming weeks we will follow up with a more detailed response to the information that was shared today but for now here are some of our initial thoughts.

Capital Gains Tax (CGT)
 – An expected increase in CGT has been well documented over recent weeks so the CGT rise in today’s budget was not unexpected. From today (inclusive), the main rate of CGT will rise from 10% to 18% for basic rate taxpayers and from 20% to 24% for higher and additional-rate taxpayers.

Business Asset Disposal Relief 
- Business Asset Disposal Relief will also be impacted by tax increases. While the lifetime allowance of £1m remains, the rate of tax will increase from 10-14% from 2025, and from 14-18% in 2026.

Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) scheme
 - These will remain (at least until 2035).

National Insurance
 - Employer’s national insurance will go up in April 2025 from 13.8-15%, but employee rates will stay the same. 

Inheritance Tax (IHT) - The current thresholds for IHT will be frozen for a further 2 years to 2030 (until today, it was frozen until 2028). So:

  • The first £325k of any estate can be inherited tax-free, rising to £500k if there is a residence included that is passed to direct descendant.
  • There is a £1m tax free allowance where one spouse or a civil partner passes their estate to the other partner.
  • Inherited pensions will be included in estates from 2027. This is potentially significant when considering the capital value of a pension pot because the IHT rate of 40% is significantly higher than when pensions are drawn as a moderate income over a number of years.

Stamp Duty Land Tax – From today this will go up by 2% on second home purchases, meaning the second home surcharge will be 5%.


Income Tax
 – As per the Government’s manifesto, income tax rates will stay the same. However, income tax thresholds will remain frozen until 2028/29, which means that as salaries go up, more people will potentially enter the higher tax rate bracket on a greater proportion of their salaries. 

Personal Allowance
 - Speculation about changes to the tapering of the personal allowance did not come to anything which is some good news.

Clearly, there is a lot more detail to be shared about today’s budget especially around the replacement of the non domicile regime. However, aware of your concerns and understanding our clients' needs, we want to do this more specifically and thoroughly over the coming weeks.

In the meantime, if you have specific concerns that you would like to talk to us about after today’s announcement, please feel free to contact us directly. We are ready and happy to talk to you about your individual circumstances and hopefully put your mind at ease about what steps to take next.

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LSR Partners - UK tax clarity for global clients
We are a firm of UK tax advisors with specific expertise in UK tax regulations for those with financial interests both in the UK and abroad.
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