Autumn Budget 2024: Key headlines

The eagerly-awaited first Budget from a Labour government in 14 years has been announced, and as expected a large amount of its focus surrounds tax, with the plan being to raise £40billion through the measures proposed.

Although some of the predicted changes were realised in the form of an increase to employer National Insurance and minimum wage – there were also some surprises, with an increase in carer’s allowance and an extension to the fuel duty freeze.

For our clients looking to make plans for their future, there is certainly plenty to be mindful of around employment, inheritance planning and property investment.

Some of the key headlines announced by Chancellor Rachel Reeves, included:

• Although there is no current change for employees, from the 6th April 2025, the rate of Employer National Insurance will increase from 13.8% to 15%. The threshold that employers will become liable to pay this will also drop from £9,100 to £5,000. However, for smaller businesses, the employment allowance increases to £10,500 from £5,000.
• Confirmation that the minimum wages will rise in April 2025, with 18 to 20-year-olds seeing an increase from £8.60 to £10 an hour – and for those over 21, an increase from £11.44 to £12.21. Apprentices’ pay will also increase from £6.40 to £7.55 an hour.
• Capital Gains Tax will increase from 10% to 18% for those paying the lower rate, while those paying the higher rate will see a change from 20% to 24%. There is no change in the residential property rate, which stays at 18% and 24%.
• From 31^st October 2024, there is an increase in Stamp Duty Land Tax for second homes, from 2% to 5%. Also affecting property, the right to buy discount afforded to council house tenants buying their home will be reduced.
• Inheritance Tax thresholds will remain at their current levels until April 2030. This means the first £325,000 of any estate can be inherited tax-free, rising to £500,000 if the estate includes a residence passed to direct descendants, and £1m when a tax free allowance is passed to a surviving spouse or civil partner.
• From April 2027, inherited pension pots will be subject to Inheritance Tax, and there are also proposals to reform agricultural and business property relief.
• From April 2026, the first £1m of combined business and agricultural assets will continue to attract no Inheritance Tax at all, but for assets over £1m, it will apply with 50% relief, at an effective rate of 20%.
• The non-dom tax regime will be abolished from April 2025. Offshore trusts will no longer be able to be used to shelter assets from Inheritance Tax.

More information and full details of the Budget are available here: GOV.UK

Commenting on the changes relating to tax, Charlotte Ranson of our Wills, Trusts & Probate team, said: “The changes announced by the government surrounding Inheritance Tax and Capital Gains Tax will certainly have implications for people’s estates and their plans for the future.

“Although there is no immediate change to the Inheritance Tax threshold – the next couple of years will see further reform for those holding pensions and offshore investments and for farm and business owners.

“Therefore, whether on a personal level or if you are a business owner, it is more important than ever that you seek the appropriate tax and estate planning advice.”

Rebecca Laws, our Head of Residential Property, added: “With the changes to Stamp Duty Land Tax for additional homes coming into force immediately, this has already seen us take a number of calls from clients in the process of buying this type of property – and as is always the case we will help all our clients understand any change that might affect their transaction and fully explain how this will be relevant to them.

“Ultimately, we await to understand the full impact this budget will have, with the government committing to increased housebuilding and investment, this promises potential growth in the property market – balanced against the potential negative impact this immediate stamp duty change could have on the buy to let and rental market.”

Whether as an individual or a business owner, if you would like help understanding the potential impact of the Budget on your future plans, do please get in touch with our expert legal teams. Please call us on 01603 620508 or complete our online enquiry form.

This article was produced on the 30th October 2024 for information purposes only and should not be construed or relied upon as specific legal advice.