Please check dates of change carefully. There is so much that we are going to deal with personal tax first and then business tax.
Personal Tax
Capital Gains Tax
The government will increase the lower and higher main rates of Capital Gains Tax (CGT) to 18% and 24% respectively for disposals made on or after 30 October 2024. These new rates will match the residential property tax rates, which are not changing.
The rate for Business Asset Disposal Relief and Investors’ Relief will increase to 14% from 6 April 2025, and will increase again to match the lower rate of 18% from 6 April 2026. The rate of CGT that applies to trustees and personal representatives will also be increased from 20% to 24% for disposals made on or after 30 October 2024.
The lifetime limit for Investors’ Relief is reduced to £1 million for all qualifying disposals made on or after 30 October 2024, matching the lifetime limit for Business Asset Disposal Relief. These measures will be legislated for in the Finance Bill 2024-25.
The government will also reform the way carried interest is taxed, ensuring that this is in line with the economic characteristics of the reward. From April 2026, all carried interest will be taxed within the Income Tax framework, with a 72.5% multiplier applied to qualifying carried interest that is brought within charge. As an interim step, the two CGT rates for carried interest will both increase to 32% from 6 April 2025.
Inheritance Tax
The Inheritance Tax (IHT) nil-rate bands are already set at current levels until 5 April 2028 and will stay fixed at these levels for a further two years until 5 April 2030. The government will also invest £52 million to digitalise the IHT service from 2027/28 to provide a modern, easy-to-use system, making returns and paying tax simpler and quicker.
The government will bring unused pension funds and death benefits payable from a pension into a person’s estate for IHT
purposes from 6 April 2027. This will restore the principle that pensions should not be a vehicle for the accumulation of capital sums for the purposes of inheritance, as was the case prior to the 2015 pensions reforms. A technical consultation at Inheritance Tax on pensions: liability, reporting and payment – GOV.UK was published alongside the Budget.
The government will reform agricultural property and business property IHT reliefs from 6 April 2026. In addition to existing nil-rate bands and exemptions, the current 100% rates of relief will continue for the first £1 million of combined agricultural and business property to help protect family businesses and farms.
The rate of relief will be 50% thereafter, and in all circumstances for quoted shares designated as “not listed” on the markets of recognised stock exchanges, such as AIM.
A technical summary can be found at Agricultural property relief and business property relief reforms – GOV.UK of the changes has been published and
the government will publish a technical consultation by early 2025.
Changes to the taxation of non-UK domiciled individuals
The government will abolish the remittance basis of taxation for non-UK domiciled individuals and replace it with a simpler and internationally competitive residence-based regime, which will take effect from 6 April 2025. Individuals who opt into the regime will not pay UK tax on foreign income and gains for the first four years of tax residence.
From 6 April 2025 the government will introduce a new residence-based system for IHT, ending the use of offshore trusts to shelter assets from IHT, and scrap the planned 50% reduction in foreign income subject to tax in the first year of the new regime. For CGT purposes, current and past remittance basis users will be able to rebase personally held foreign assets to 5 April 2017 on a disposal where certain conditions are met.
Overseas Workday Relief will be retained and reformed, with the relief extended to a four-year period and the need to keep the income offshore removed. The amount claimed annually will be limited to the lower of £300,000 or 30% of the employee’s net employment income.
Secondary Class 1 National Insurance Contributions (employer NICS)
The government will increase the rate of employer NICs from 13.8% to 15% from 6 April 2025. The Secondary Threshold is the point at which employers become liable to pay NICs on employees’ earnings, and is currently set at £9,100 a year. The government will reduce the Secondary Threshold to £5,000 a year from 6 April 2025 until 6 April 2028, and then increase it by CPI thereafter.
The Employment Allowance currently allows businesses with employer NICs bills of £100,000 or less in the previous tax year to deduct £5,000 from their employer NICs bill. The government will increase the Employment Allowance from £5,000 to £10,500, and remove the £100,000 threshold for eligibility, expanding this to all eligible employers with employer NICs bills from 6 April 2025.
Stamp Duty Land Tax
From 31 October 2024 the Higher Rates for Additional Dwellings (HRAD) surcharge on Stamp Duty Land Tax (SDLT) will be increased by 2 percentage points from 3% to 5%. Increasing HRAD ensures that those looking to move home, or purchase their first property, have a comparative advantage over second home buyers, landlords, and businesses purchasing residential property.
This is expected to result in 130,000 additional transactions over the next five years by first-time buyers and other people buying a primary residence.
This surcharge is also paid by non-UK residents purchasing additional property. The single rate of SDLT that is charged on the purchase of dwellings costing more than £500,000 by corporate bodies will also be increased by 2 percentage points from 15% to 17%.
As legislated for in the Stamp Duty Land Tax (Temporary Relief) Act 2023, from 1 April 2025, the threshold for paying the main rates of SDLT will return to £125,000. For first-time buyers, the threshold will return to £300,000 and the purchase price limit for accessing First-Time Buyers’ Relief will return to £500,000.
High Income Child Benefit Charge reform, simplification and targeting of economic support to households
The government will not proceed with the reform to base the High Income Child Benefit Charge (HICBC) on household incomes.
To make it easier for all taxpayers to get their HICBC right, the government will allow employed individuals to report Child Benefit payments through their tax code from 2025, and
prepopulate Self-Assessment tax returns with Child Benefit data for those not using this service.
The government will also explore how better data use and sharing across government departments can improve the targeting of economic support to households, especially in times of crisis.