REDUCTIONS, RELIEFS AND ALLOWANCES:
Further 2% reduction in employee Class 1 and self-employed Class 4 NIC contributions from 6 April 2024.
A reduction in the CGT rate applicable to gains made from the disposal of non-exempt residential property from 28% to 24% from 6 April 2024.
Increase in the High-Income Child Benefit threshold from £50,000 to £60,000 from 6 April 2024, and there will be a tapered charge between £60,000 and £80,000. Subject to a consultation on moving towards a household system rather than one based on individual incomes from April 2026.
The VAT registration threshold increased from £85,000 to £90,000 from April 2025.
From 6 April 2024, the dividend allowance will be £500.
The Blind Person’s allowance will be £3,070 and the Married Couple’s Allowance will be between £4,280 and £11,080.
ABOLITIONS:
Multiple Dwellings Relief (MDR) for Stamp Duty abolished for investors from 1 June 2024.
The requirement to pay Class 2 self-employed NICs is removed from 6 April 2024. There will be a further consultation later in the year concerning the abolition.
Furnished Holiday Letting (FHL) tax regime abolished from 6 April 2025, meaning that these properties will be subject to the same rates of CGT as any other residential property.
The geographical scope of Agricultural Property Relief and Woodlands Relief is restricted to assets in the UK only. Any assets situated in the Crown Dependencies and the EEA will lose their protected IHT status. Extension of Agricultural Property Relief (APR) to non-agricultural environment land will be introduced from 6 April 2025.
IMPLEMENTATIONS:
Consultation on the launch of a new ‘UK ISA’. This will permit an investment of £5,000 per annum in a qualifying plan in addition to the £20,000 allowance for existing ISAs.
Further legislation is to be in place to ensure individuals cannot use a company to bypass anti-avoidance legislation, known as Transfer of Assets Abroad (ToAA) provisions, to avoid UK income tax. The changes will take effect for income arising to a person abroad from 6 April 2024.
NON-DOMICILE REFORMS
Replacement of the ‘non-dom’ tax breaks on foreign income and capital gains with a more straightforward residency-based system from April 2025. A consultation will be held to review and align the non-dom provisions for inheritance tax ahead of 2025.
Remittance basis of taxation to be replaced by residence-based system from 6 April 2025; No income and capital gains tax on foreign income and gains (FIG) for first four (4) years, provided they have been non-UK tax resident for the last 10 years.
Overseas Workday Relief (OWR) for the first three tax years of UK residence will be retained for income from employment duties carried out overseas, whether or not these earnings are brought to the UK.
Transitional provisions existing non-dom residents for foreign income and capital gains (FIG regime):
A “Temporary Repatriation Facility” (TRF) to allow existing remittance basis payers to remit accrued foreign income and gains into the UK at 12% in the tax years 2025/26 and 2026/27 (rather than the usual rates of up to 45% on income and 20% on gains).
Current UK resident non-doms who have claimed remittance basis will have the option to rebase the value of capital assets to 5 April 2019.
A temporary 50% exemption on foreign income for non-doms who will lose access to the remittance basis on 6 April 2025 and are not eligible for the new regime (2025/26).
Claims to use the new 4-year FIG regime are to be made each year to which it is to apply. If an individual chooses to be taxed under the new regime, they will lose entitlement to personal allowances and the capital gains tax annual exempt amount.
FIG arising in the trust whenever established from 6 April 2025 will be taxed on the settlor on the same basis as UK domiciled settlors, unless the settlor is eligible for the new 4-year FIG regime.
Non-dom reforms for inheritance tax remains to be seen and a consultation in the Summer 2024 is likely to be carried out.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax or accounting advice. If you have any questions or need advice, please contact us on the below.
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