Your Guide to the 2024 Autumn Budget
On 30th October, Rachel Reeves delivered Labour’s first budget in over 14 years, making history as the first woman to do so as the Chancellor of the Exchequer.
Labour’s Budget focused predominantly on increased spending on public services and investment, supporting the green economy, addressing the housing crisis, allocating compensation payments to victims of the Post Office Horizon and infected blood scandals and revising tax policies.
Here is some of the main proposals which may affect you, your property, current asset management, estate planning and your business.
Property
- The Stamp Duty Land Tax Surcharge has increased on the purchase of second homes from 3% to 5%.
- Capital Gains Tax rates have increased from 10% to 18% for basic-rate taxpayers and from 20% to 24% for higher-rate taxpayers from 30th October 2024.
- Principal Private Residence Relief remains in place for the sale of your primary home.
Estate Planning
- The current Inheritance Tax thresholds will remain at their current levels until April 2030. The Nil Rate Band will remain at £325,000 and the Residence Nil Rate Band will remain at £175,000.
- Agricultural Property Relief and Business Property Relief will be reformed from April 2026 with 100% relief for the first £1 million of combined assets and 50% relief thereafter. The £1 million exception is not transferable between spouses so careful planning is needed to ensure you make the most of the available allowances.
- Relief for shares not listed on a recognised stock exchange (such as AIM) has been halved to 50% from April 2026.
- Currently, pensions are excluded from Inheritance Tax. From April 2027, any funds left in your personal pension pot on your death will be included for Inheritance Tax purposes.
- The non-domicile regime has been abolished meaning that existing excluded property trusts would fall within the scope of Inheritance Tax. However, the Budget confirmed that foreign property held in trusts created before 30 October 2024 will not be subject to Inheritance Tax on the death of the settlor but will be subject to periodic Inheritance Tax charges.
Businesses
- Corporation Tax rates will remain at 25% The Small Profits Rate and Marginal Relief will continue at their current rates and thresholds.
- Employer’s National Insurance contributions will increase by 1.2%, from 13.8% to 15% from April 2025.
- The threshold at which businesses start paying National Insurance contributions on each employees’ salary reduces from £9,100 per year to £5,000 from April 2025. For some employers, these increases will be partly mitigated by increases to the employment allowance from £5,000 to £10,500 and the £100,000 employer’s National Insurance threshold for eligibility will be removed from April 2025 increasing its availability to a larger number of employers.
- From April 2026 employers will be required to report and pay tax and National Insurance on benefits in kind on a real time basis, with the exception of accommodation and loans.
- The rate for Business Asset Disposal Relief and Investors’ Relief will remain at 10% on gains of £1 million for this year, increasing to 14% from April 2025 and 18% from April 2026.
- Minimum wage increases for those between 18 and 20-years old from £8.60 to £10.00 and apprentice wage increases from £6.40 to £7.55 in April 2025.
- National living wage increases by 6.7% to £12.21 per hour from April 2025.
- The Government will introduce permanently lower business rates for retail, hospitality and leisure businesses from 2026-27. Until then they will receive 40% relief on business rates up to a cap of £110,000.
- Taxes on carried interest, generally paid by private equity managers, will rise from 28% to 32% from April.
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