Relevant Highlights from the UK Government’s October 2024 budget

Income Tax
There are no increases in income tax rates for employees or the self-employed. The basic and higher rates remain unchanged, providing stability for working individuals.

National Insurance Contributions (NICs)
There will be an increase in employer National Insurance contributions from 13.8% to 15%. The threshold will also be lowered from £9, 100 to £5, 000 per year, effective April 2025.

Capital Gains Tax
There was an increase in the lower and higher CGT rates to 18% and 24% respectively, an increase in Business Asset Disposal Relief (BADR) and Investors’ Relief (IR) to 14% from April 2025 and to 18% from April 2026 and an increase in the CGT rate on carried interest to 32% before transitioning to full Income Tax treatment.

Inheritance Tax (IHT)
The nil-rate band for inheritance tax will remain frozen at £325, 000 until April 2029. Additionally, the residence nil-rate band will stay at £175, 000. This freeze is effectively a tax increase as property values rise.

Non-Domiciled Individuals
The remittance basis of taxation for non-UK domiciled individuals will be abolished, replaced by a residence-based regime starting April 2025. This change aims to ensure fairer taxation of foreign income and gains.

Stamp Duty Charge on Second Homes
The chancellor increased the stamp duty surcharge on second homes and buy-to-let properties from 3% to 5%, effective immediately, impacting landlords and property investors.

The budget was designed to balance the need for increased public funding with the goal of minimising the financial impact on ‘working people’ and families. However, it’s critics note the increased burden that businesses will now face - against an already challenging economic landscape.

Inheritance Tax