BUDGET 2024 What was announced?

The Chancellor Jeremy Hunt gave possibly his last Budget statement on Wednesday. That is unless a late election is called and an Autumn Statement is made, you never know as they say watch this space or your favourite news channel.

The Headlines -

·         A 2% reduction in the rate of National Insurance Contributions.

·         A 4% reduction in Capital Gains Tax for higher rate taxpayers disposing of residential property.

·         The abolition of the Furnished Holiday Lettings regime.

·         Reform of non-domicile taxation.

·         The VAT threshold will also rise by £5,000.

National Insurance Contributions

From 6 April 2024:

·         The main rate of employee Class 1 NICs is reduced by 2%, from 10% to 8%.

·         The main rate of self-employed Class 4 NICs is also reduced by 2%, from 8% to 6%.  

Higher-Income Child Benefit Charge (HICBC)

·         Reform of the Higher-Income Child Benefit Charge and the creation of a household-based system from April 2026.

·         Consulting on the rules for allowing HMRC to collect details of household income.

·         Threshold raised from £50,000 to £60,000 and bring the taper up to £80,000 from £60,000. 

ISA & Investments

·         Issue of a new British savings bond.

·         Reform of the ISA system to encourage investment in UK assets.

·         A £5,000 new UK investment ISA on top of existing ISA allowances 

Capital Gains Tax (CGT) Rate for Residential Property Sales

From 6 April 2024

·         A reduction in the higher rate of CGT from 28% to 24% for sales of residential property.  

·         The lower rate of tax remains at 18% for any gains that fall within an individual's basic rate band.

Furnished Holiday Lettings Tax Regime

From April 2025

·         The Furnished Holiday Lettings tax regime is to be abolished. 

·         The government had identified the distortions created in local economies because of the regime which allows this form of letting to be treated as a trade for Income Tax, Capital Gains Tax and Corporation Tax.  

Stamp Duty Land Tax (SDLT)

From 1 June 2024, with transitional rules for contracts exchanged on or before 6 March 2024.

·         The abolition of Multiple Dwellings Relief (MDR) from Stamp Duty Land Tax (SDLT).

·         A consultation concluded that it does not support investment in residential property in the private rented sector. 

SDLT:  Acquisitions by Registered Social Landlords and Public Bodies

·          A technical change to the SDLT legislation to remove some out-of-date definitions will ensure public bodies will be removed from the scope of the 15% SDLT higher rate charge where the effective date of transaction (usually the date of completion) is on or after 6 March 2024.

SDLT First-time Buyers' Relief

·         A change to the conditions for First-time Buyers' Relief to assist the victims of domestic abuse who use a nominee or bare trust arrangements to prevent former partners from finding their new address were previously unable to claim relief.

Investment Zones

·         Six new English Investment Zones will be created:  Greater Manchester, Liverpool City Region, North East of England, South Yorkshire, West Midlands and Tees Valley.

·         The duration of Investment Zones will be extended from five to ten years in Scotland and Wales, with details of their four zones being announced later this year.  

Non-domiciled taxpayers

From 6 April 2025:

·         The remittance basis will be abolished and replaced with a new opt-in residence-based regime.

o    Individuals in the new regime will not pay UK tax on foreign income and gains for the first four years of UK tax residence. 

o    Transitional rules will apply to existing individuals claiming the remittance basis.

·         Overseas Workday Relief will be reformed with eligibility for the relief based on the new residence-based regime.

·         Inheritance Tax will also move to a residence-based regime, with a 10-year exemption and 'tail-provision' periods for leavers and arrivers. 

Transfer Of Assets Abroad (TOAA)

From 6 April 2024:

·         Legislation in Spring Finance Bill 2024 will prevent UK resident individuals from bypassing the TOAA provisions by using a close company to transfer assets offshore.

I expect over the coming days the press will have plenty to say about the announcements. And over the coming weeks, the finer details will become more clear.

If you have any questions then please do not hesitate to contact me on 01442 828006 or jreeves@taxmatters.tax