Autumn Budget 2024: What To Expect ?
As we approach the new government's first Autumn Budget on 30th October, significant tax changes could be on the horizon.
Whilst we do not know for sure what will be in the Budget, Rachel Reeves has made it clear the government needs to raise tax revenues and therefore tough decisions will be made. This has caused plenty of discussion in the media regarding possible changes to taxation. James McLaughlin, Tax Director has highlighted some of the key areas to watch, following weeks of speculation:
• Capital Gains Tax: Likely that main 20% CGT rate will increase. Speculation that rates might increase to 25-30% (unlikely, but still possible, increase could be even higher, aligning CGT rates with Income Tax rates). The lower 10% CGT rate for entrepreneurs expected to be abolished. Taxpayers are keen to know whether these changes will take effect immediately or from 6 April 2025.
• Pension Tax Relief: Speculation around reduced tax relief on pension contributions for higher and additional rate taxpayers. Will a new flat rate be introduced?
• Income Tax: While the government has pledged not to raise Income Tax rates, changes to tax reliefs and exemptions are possible. Additionally, frozen tax thresholds could result in more taxpayers being pushed into higher tax brackets.
• Inheritance Tax: Key IHT reliefs, such as Business Property Relief and Agricultural Property Relief, may face reforms. Proposed introduction of a new residence-based IHT system, as part of the Non-Dom reforms, could have broader implications.
• Non-Dom Reforms: The abolition of the current non-dom regime is anticipated from 6 April 2025. Clarity on the proposed “foreign income and gains” regime, as well as transitional measures for UK-resident non-doms and offshore trusts, is eagerly awaited.
Given the potential scale of the upcoming tax changes, reviewing your tax planning strategies will be crucial. To understand how the Autumn Budget might impact you, your family, or your clients, please contact us now or after the Budget for tailored advice.
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Written by James McLaughlin, Director