As I’m sure you have seen, the Chancellor announced his Spring Budget yesterday – given the current political situation, we don’t expect that this will be the final Budget of 2024 but right now, these are the highlights that could be relevant to you. I also wanted to remind you about the approaching end of tax year deadline – have a look here for our summary.
UK ISA
A new UK ISA is to be introduced to support UK investment and will give you an additional annual subscription allowance of £5,000 on top of the existing £20,000 limit. Consultation on the design and implementation of the ISA will be open until 6 June 2024 so we will keep you posted!
Capital Gains Tax and Residential Property
There was some news about a cut in CGT which will benefit multiple homeowners and those of you with buy-to-let properties. The higher residential property CGT rate is to be cut from 28% to 24% from the 6th April. Gains falling within basic rate will still be taxed at 18%. The CGT rates for all other disposals of non-residential property remain at 10% and 20% and as previously announced the annual CGT annual exempt amount will fall from £6,000 to £3,000.
Reduction in National Insurance
From the 6th April, Class 1 NI contributions will be cut by 2%. The new rate of 8% will apply to earnings between the primary earnings threshold and the upper earnings limit which gives a maximum saving of £754 pa.
As previously announced in the Autumn Statement, there are changes to the way those of you who are self-employed will pay NI. The only change to this is around Class 4 NI contributions between the lower and upper profits limit (up to £37,700) and this will be cut by a further 2% on top of the existing 1% reduction. This could give rise to a total maximum annual saving of around £1,500.
Reforming child benefit
From April 2024, the threshold at which child benefit is withdrawn will increase from £50,000 to £60,000, and it will be reduced by £1 for every £200 of income. This means Child Benefit reduces to zero once the higher earner’s income exceeds £80,000.
Furnished Holiday Lets
Furnished holiday lets will be taxed in the same way as buy-to-let properties from 6 April 2025. This will mean that income from furnished holiday lets will cease to be relevant UK earnings for pension purposes.
Changes to the taxation of non-UK domiciles
This is a complex area, but it has been announced that from the 6th April 2025, the remittance basis of taxation for non-UK domiciled individuals will be abolished and replaced with a new Foreign Income and Gains (FIG) regime which is determined by UK residency rather than domicile. The legislation has not yet been released and if this does affect you, it will be important to take advice on what the implications could be.
As ever, please do get in touch if you have any questions or if we can help with anything.
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